Energy Future wraps tender offer for first-lien notes settlement

By Marisa Wong

Madison, Wis., June 25 – Energy Future Holdings Corp. subsidiaries Energy Future Intermediate Holding Co. LLC and EFIH Finance Inc. announced the results of their first-lien settlement, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The tender offer ended at 11:59 p.m. ET on June 11, previously extended from 5 p.m. ET on June 6.

The companies began the tender offer on May 7 for two series of notes related to its first-lien settlement.

The offer covers the company’s $502,714,000 of 6 7/8% senior secured notes due 2017 and its $3,482,106,000 of 10% senior secured notes due 2020.

On June 19, each holder who tendered first-lien notes prior to 5 p.m. ET on May 19, the early participation date, received as payment in full of any claims arising out of its first-lien notes a principal amount of loans under the first-lien debtor-in-possession credit facility equal to 105% of the principal amount of the first-lien notes plus 101% of the accrued interest through June 19 at the non-default rate on that principal.

Each holder who tendered first-lien notes after the early participation date and prior to the expiration date received as payment in full of any claims arising out of its first-lien notes a principal amount of loans under the first-lien DIP facility equal to 103.25% of the principal amount of the first-lien notes plus 101% of the accrued interest through June 19 at the non-default rate on that principal.

About $420 million, or 10%, of the outstanding first-lien notes were exchanged and settled under the offer, the filing said.

Under a restructuring support and lock-up agreement dated April 28, holders of about $1.26 billion, or 32%, of the aggregate outstanding principal amount of the first-lien notes had agreed to the terms of the settlement.

According to Wednesday’s 8-K, these holders received on June 19 as payment in full of any claims arising out of their first-lien notes a principal amount of loans under the first-lien DIP facility equal to 105% of the principal amount of notes plus 101% of the accrued interest (including, with respect to the 6.875% notes and some of the 10% notes, additional interest required under related registration rights agreements) through June 19 at the non-default rate on that principal.

Previous announcements

On June 6 the U.S. Bankruptcy Court for the District of Delaware issued an order approving the first-lien settlement and the issuer’s new senior secured super-priority DIP credit agreement, subject to a stay until 12:01 a.m. ET on June 12, a previous filing noted.

Holders of $1,673,252,000, or 42%, of the $3,984,820,000 outstanding amount of first-lien notes had agreed to participate, according to an SEC filing on May 22.

As of May 19, holders of $488,654,000, or 97.2%, of the 6 7/8% notes and $1,184,598,000, or 34%, of the 10% notes had agreed to participate in the first-lien settlement, the company previously said.

The company said before that in no event would the payment in the offer be adjusted in any manner to take into account the actual amount of any original issue discount that is applicable in connection with syndication of the DIP loans and the closing of the DIP facility.

The completion of the first-lien settlement was conditioned on the closing of the DIP facility. The first-lien settlement also required approval by the bankruptcy court.

Holders participating in the first-lien settlement were required to tender all of their first-lien notes. No holder was required to participate in the first-lien settlement, and any holder’s participation was voluntary. The first-lien settlement was not conditioned on participation by holders of any minimum principal amount of first-lien notes.

Epiq Systems (646 282-2500 or 866 734-9393, or by email at tabulation@epiqsystems.com) is the agent and depositary agent.

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

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