The 'A' corporate credit rating on Southern California Gas Co. (SoCal Gas) reflects the consolidated credit profile of holding company Sempra Energy (Sempra), its utility subsidiaries, SoCal Gas and San Diego Gas&Electric (SDG&E), and several material unregulated ventures including energy trading, merchant generation, LNG terminals and energy-related investments in Mexico and South America. Regulation in California, which mandates that the utilities maintain a 48% equity layer, provides sufficient insulation to separate the corporate credit ratings on the utilities from those of the parent and unregulated subsidiaries, which have a corporate credit rating of 'BBB+'. As a consequence of this restriction, the financial profile at SoCal Gas is significantly superior to the consolidated financial profile of Sempra Energy. In
