Energy Future Creditors Agree to New Debt Rules in Bond Exchange

Energy Future Holdings Corp. creditors agreed to exchange $1.37 billion of the company’s bonds and to amend rules governing its securities as the power producer shifts liabilities before a potential restructuring.

Lenders tendered $113 million of 9.75 percent notes due 2019 and $1.06 billion of 10 percent debt maturing in 2020, Dallas-based Energy Future said today in a regulatory filing. The company offered Dec. 21 to swap as much as $1.3 billion of new 10 percent securities due 2020 linked to Energy Future Intermediate Holding Co. for secured obligations at the parent company as well as Energy Future Intermediate.

Energy Future also received requisite consents to amend rules governing its secured debt, which may be revoked before Jan. 24, according to the statement. The company proposed changes in December that would delete restrictive covenants and certain events of default from the indentures.

The transaction follows an agreement this week to extend the maturity of $646 million in revolving credit commitments of Energy Future’s unregulated electricity unit. Texas Competitive Electric Holdings Co. added $340 million in term loans due in 2017 to compensate creditors, who allowed the unit to push the maturity on commitments expiring this year to 2016.

A restructuring at that unit is likely to occur within the next six to 12 months, James Hempstead, an analyst at Moody’s Investors Service, said in a Jan. 3 report.

In 2007, KKR & Co., TPG Capital and Goldman Sachs Capital Partners took Energy Future private for $43.2 billion, the largest leveraged buyout ever. The power producer has posted seven consecutive quarterly losses and had $37.4 billion of long-term borrowings as of Sept. 30.

Energy Future, formerly known as TXU Corp., announced both the exchange offer and debt extension last month.

Before it's here, it's on the Bloomberg Terminal.