DALLAS – Energy Future Holdings Corp. (“EFH”) today announced that, as a part of its ongoing liability management program, lenders under the senior secured credit facilities of EFH’s indirect wholly-owned subsidiary, Texas Competitive Electric Holdings Company LLC (“TCEH”), have agreed to extend the maturities of more than 80% of the aggregate amount of the outstanding term loans and deposit letter of credit loans under the senior secured credit facilities. In addition, lenders have agreed to extend a substantial portion of their commitments under TCEH’s revolving credit facility. As a result, if the conditions to the effectiveness of the extensions are met (including the pro-rata repayment of loans and reduction of commitments described in more detail below) and the extensions become effective as contemplated, there will be approximately:
- $15,367 million aggregate principal amount of term loans with maturities extended from 2014 to 2017 and $3,812 million aggregate principal amount of non-extended term loans;
- $1,020 million aggregate principal amount of letter of credit loans with maturities extended from 2014 to 2017 and $43 million aggregate principal amount of non-extended deposit letter of credit loans; and
- $1,384 million aggregate principal amount of revolving commitments with maturities extended from 2013 to 2016 and $671 million aggregate principal amount of non-extended commitments under the revolving credit facility.
“Today’s announcement is a very significant step in our ongoing efforts to improve our balance sheet, “ said Paul Keglevic, Chief Financial Officer, Energy Future Holdings. “Operationally, we continue to perform at high levels and are an industry leader. Upon effectiveness, these extensions will provide us with more time to create additional enterprise value and give power markets the opportunity to recover.”
If the extensions become effective, the interest rate on the extended term loans and extended deposit letter of credit loans will increase from LIBOR plus 3.50% to LIBOR plus 4.50%. The interest rate on the extended revolving commitments will increase from LIBOR plus 3.50% to LIBOR plus 4.50%, and the undrawn fee with respect to such commitments will increase from 0.50% to 1.00%.
If the extensions become effective, the extended loans and commitments will include a “springing maturity” provision pursuant to which (a) in the event that more than $500 million aggregate principal amount of TCEH’s 10.25% Senior Notes due 2015 and 10.25% Senior Notes due 2015, Series B (other than notes held by EFH or its controlled affiliates as of March 31, 2011 to the extent held as of the date of determination) or more than $150 million aggregate principal amount of the TCEH’s 10.50%/11.25% Senior Toggle Notes due 2016 (other than notes held by EFH or its controlled affiliates as of March 31, 2011 to the extent held as of the date of determination), as applicable, remain outstanding as of 91 days prior to the maturity date of the applicable notes and (b) TCEH’s Consolidated Total Debt to Consolidated EBITDA (as each term is defined in the senior secured credit facilities) ratio is greater than 6.00 to 1.00 at such applicable determination date, then the maturity date of the extended loans and commitments will automatically change to 90 days prior to the maturity date of the applicable notes.
The closing and effectiveness of the extensions will be conditioned upon the satisfaction of certain conditions, including, among others, the closing of an offering of senior secured notes (unless waived by TCEH), and the aggregate pro-rata payment of certain outstanding loans under the senior secured credit facilities and, solely with respect to the extended revolving commitments, the reduction of certain commitments under the revolving credit facility. The extension of the term loans and deposit letter of credit loans will not be conditioned upon the effectiveness of the extension of the commitments under the revolving credit facility. If the extensions become effective, TCEH will pay an up-front extension fee of 350 basis points to lenders holding extended term loans and extended letter of credit loans.
The information set forth in this news release is for informational purposes only and shall neither constitute an offer to sell nor the solicitation of an offer to buy any securities of TCEH or any of its affiliates, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. The senior secured notes to be offered have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state securities laws. The securities will be offered inside the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act.
About Energy Future Holdings
EFH is a Dallas-based holding company engaged in competitive and regulated energy market activities, primarily in Texas. Its portfolio of competitive businesses consists primarily of TXU Energy, a retail electricity provider with approximately 2 million customers in Texas, and Luminant, which is engaged largely in power generation and related mining activities, wholesale power marketing and energy trading. Luminant has approximately 15,400 MW of generation in Texas, including 2,300 MW fueled by nuclear power and 8,000 MW fueled by coal. Luminant is also the largest purchaser of wind-generated electricity in Texas and fifth largest in the United States. EFH’s regulated operations consist of Oncor, which operates the largest electricity distribution and transmission system in Texas with more than three million delivery points and 118,000 miles of distribution and transmission lines. While EFH indirectly owns approximately 80 percent of Oncor, the management of Oncor reports to a separate board with a majority of directors that are independent from EFH.
Forward Looking Statements
This Release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. Forward-looking statements are generally not statements of historical facts. These forward-looking statements are based on our current beliefs and expectations. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control), including whether the Extension will become effective. The factors that could cause actual results or outcomes to differ materially from these forward-looking statements include those discussed in EFH Corp.’s and EFCH’s Annual Reports on Form 10-K for the fiscal year ended December 31, 2010. You are cautioned not to place undue reliance on these forward-looking statements, which are applicable only on the date of this Current Report on Form 8-K. Neither EFH Corp. nor EFCH undertakes any obligation to publicly release any revision to their respective forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K.