Moody's takes action on Energy Future

Moody's Investors Service said it withdrew Energy Future Holdings Corp.'s Caa3 corporate family rating, Caa3-PD probability of default rating, SGL-4 speculative grade liquidity rating and developing outlook.

At the same time, the agency assigned a Ca corporate family rating, C-PD probability of default rating and SGL-4 to speculative grade liquidity rating to Energy Future Competitive Holdings Co. and a B3 corporate family rating, B3-PD probability of default rating and SGL-4 speculative grade liquidity rating to Energy Future Intermediate Holdings Co. LLC. Both are intermediate subsidiary holding companies wholly owned by Energy Future Holdings, and their outlooks are negative.

Also, the agency downgraded Energy Future Competitive's senior notes to C (LGD6, 97%) from Ca (LGD6, 96%) and Texas Competitive Electric Holdings Co. LLC's credit facilities and senior secured first-lien notes to Caa3 (LGD3, 37%) from Caa1 (LGD2, 26%), senior secured second-lien notes to Ca (LGD5, 70%) from Caa3 (LGD4, 58%) and senior unsecured notes to C (LGD6, 96%) from Caa3 (LGD5, 82%).

Moody's downgraded Oncor Electric Delivery Co.'s senior secured notes to Baa3 from Baa2 and changed its outlook to stable from developing.

The agency upgraded Energy Future Intermediate's 9¾% senior secured first-lien notes due 2019 (now senior unsecured) to B3 (LGD4, 53%) from Caa3 (LGD4, 62%), other senior secured first-lien notes to B2 (LGD3, 33%) from Caa3 (LGD4, 58%) and senior secured second-lien notes to B3 (LGD4, 53%) from Caa3 (LGD4, 58%).

Finally, the agency upgraded Energy Future Holdings' Energy Future Intermediate transfer notes due 2019 and 2020 to Caa2 (LGD6, 95%) from Caa3 (LGD4, 58%) and senior unsecured notes to Caa2 (LGD6, 95%) from Ca (LGD6, 96%).

The rating actions reflect a series of recent actions taken by Energy Future Holdings to insulate both Energy Future Holdings and Energy Future Intermediate from its more distressed subsidiary, Energy Future Competitive, which appears to have a much higher probability of default within the consolidated corporate family, the agency said.

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