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Texas Competitive, Energy Future make May interest payment in kind
By Toni Weeks
San Diego, Aug. 2 - Texas Competitive Electric Holdings Co. LLC made the May payment on its TCEH toggle notes by using the payment-in-kind feature on those notes and intends to make a PIK payment for its November interest payment, according to a 10-Q filing with the Securities and Exchange Commission.
Similarly, Energy Future Competitive Holdings Corp. made the May payment and expects to make the November interest payment on its EFH toggle notes by using the PIK feature of those notes.
Texas Competitive said that as a consequence the interest rate on its notes increased to 11¼% from 10½% during the applicable periods. The company increased the principal amount of the notes by $88 million in May and is expected to increase the principal amount of the notes by another $93 million in November.
As a result, the company's liquidity increased by $82 million in May and is expected to increase by about $87 million in November, constituting the cash interest amounts that otherwise would have been payable on the notes.
Energy Future said in the 10-Q that the interest rate on its toggle notes increased to 12% from 11¼% during the applicable periods. The company increased the principal amount of its toggle notes by $26 million in May and is expected to issue an additional $28 million in November.
The company also reported that it issued an additional $167 million principal amount of the notes in May to Energy Future Intermediate Holding Co. LLC, the issuer of the toggle notes, and is expected to issue $177 million more of the notes in November.
According to the 10-Q, the company's liquidity increased in May by $25 million and is expected to increase by another $26 million in November. The amounts constitute the amount of cash interest that would have been payable on the notes.
Texas Competitive, formerly TXU Energy Co. LLC, is a Dallas-based energy company. Its parent company is Dallas-based Energy Future.
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