Energy Future subsidiary approved for $2.33 billion interim DIP access

By Kali Hays

New York, May 2 - Energy Future Holdings Corp. subsidiary Texas Competitive Electric Holdings Co. (TCEH) obtained interim approval for access to $2.33 billion of its proposed $4.475 billion debtor-in-possession financing, according to a Friday order with the U.S. Bankruptcy Court for the District of Delaware.

The funding is to help support normal business operations during the Chapter 11 process, and the court found that access was necessary in order to preserve the value of the estate.

As previously reported, TCEH $4,475,000,000 24-month facility is comprised of a $1.95 billion revolving credit facility, a $1,425,000,000 term loan facility and a $1.1 billion delayed-draw term facility.

Citibank, NA is the administrative and collateral agent.

Interest on revolver loans will be either Base rate plus 150 basis points or Eurodollar plus 250 bps, and interest on term loans will be either Base rate plus 175 bps or Eurodollar plus 275 bps.

Energy Future said the TCEH will also permit TCEH subsidiary Luminant Mining Co. LLC to grant the Railroad Commission of Texas a collateral bond in an amount equal to or in excess of Luminant Mining's current reclamation bond obligations.

As reported, Energy Future's other subsidiary, Energy Future Intermediate Holding Co. (EFIH), has also secured $5.4 billion in financing, subject to court approval, with Deutsche Bank AG New York Branch serving as administrative agent.

Interest on that 24-month facility will be either Base rate plus 225 bps or Libor plus 325 bps with a 1% floor.

The $5.4 billion facility will be used to refinance the EFIH debtor's first-lien secured notes and to finance working capital needs and general corporate purposes.

The EFIH financing also includes a $3 billion junior incremental loan, which will be convertible into equity under the company's plan.

Energy Future also received court approval of its first day motions which included requests to continue payments to employees and vendors, according to a Friday news release from the company.

The release stated that the agreement with certain key financial stakeholders to reduce approximately $40 billion of company debt is supported by holders of approximately 41% of the value of TECH first lien debt, 76% of the EFIH unsecured debt, 32% of EFIH first lien debt, 35% of EFIH second lien debt and 73% of EFIH unsecured debt, as well as three private equity holders of Energy Future.

A final hearing to approve DIP financing is scheduled for June 5.

Energy Future, a Dallas-based power generation company and utility operator, filed for bankruptcy April 29. The Chapter 11 case number is 14-10979.

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