S&P: Sempra unaffected

Standard & Poor's said that the impending start of a jury trial in the Continental Forge antitrust litigation will not affect the rating or outlook on Sempra Energy.

Subject to the completion of ongoing hearings on pretrial motions, the trial could start in the Superior Court of the State of California, County of San Diego, as early as Sept. 12 and is anticipated to last three to five months.

"Although the lawsuit represents a potentially large contingent liability for Sempra, and despite the unpredictability of a jury trial, the ratings are unaffected for a combination of reasons," S&P credit analyst Swami Venkataraman said.

"First, any financial impact from the lawsuit will be limited to $75 million for at least the next three years, and perhaps even longer. Second, a victory for the plaintiffs is not at all certain. Third, El Paso Corp. reached a global settlement on this and many other lawsuits in 2003 for a combined $1.6 billion. Of this amount, only about $225 million was an upfront cash payment. Sempra continues to work toward such a settlement as well. Finally, other lawsuits currently underway could have an impact on this lawsuit. This includes Sempra's application pending before FERC asking it to declare exclusive jurisdiction in such matters as those raised in the Continental Forge case."

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