November 4, 2008 / 6:36 PM / 9 years ago

TEXT-S&P release on Energy Future Holdings

2 Min Read

 (The following statement was released by the rating agency)
 Nov 4 - Standard & Poor's Ratings Services said today that its ratings and
outlook on Energy Future Holdings Corp. (EFH; B-/Stable/NR) and subsidiary
Texas Competitive Electric Holdings Co. LLC (TCEH) are not affected following
the company's recent decision to elect a PIK option for its next interest
payment date on $4.2 billion in senior toggle notes. EFH elected the PIK option
on its $2.5 billion senior toggle notes due 2017 and TCEH elected the PIK
option on its $1.75 billion senior secured toggle notes due 2016. The decision
will save the company a combined $233 million over the next six months, and
essentially replace the liquidity lost from Lehman Brothers exposure credit
facilities. However, continued reliance on the PIK option to improve liquidity
without any offsetting debt reduction would increase overall debt costs and
worsen financial metrics and potentially place downward pressure on the rating.
As of Oct. 14, 2008, consolidated liquidity, excluding Oncor Electric Delivery
Company LLC (BBB+/Stable) and availability under the TCEH's LOC facility, was
about $3.5 billion and will improve in early November 2008 by another $1.25
billion upon the close of the sale of about 20% of Oncor to a third party.
 (New York Ratings Team)


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