Underwriters launch $4.5 billion cash-pay notes for TXU LBO

By Paul A. Harris

St. Louis, Oct. 15 - On Monday underwriters launched a combined $4.5 billion of senior cash-pay notes which are part of the TXU Corp. LBO financing, according to informed sources.

The notes are expected to price late in the Oct. 22 week.

Energy Futures Holdings is offering $2 billion of 10-year notes (B3/CCC+).

Morgan Stanley, Goldman Sachs & Co., Citigroup, JP Morgan, Lehman Brothers and Credit Suisse are joint bookrunners.

The notes come with five years of call protection.

In addition, Texas Competitive Electric Holdings is offering $2.5 billion of eight-year notes (B3/CCC).

Goldman Sachs & Co., Morgan Stanley, Citigroup, JP Morgan, Lehman Brothers and Credit Suisse are joint bookrunners for the Texas Competitive Electric Holdings notes, which come with four years of call protection.

Both tranches are being marketed via Rule 144A with registration rights.

Proceeds will be used to help fund the LBO of the company by Kohlberg Kravis Roberts & Co. and Texas Pacific Group; Dallas-based energy company.

The expected overall combined total notes issuance for the LBO financing is $11.25 billion.

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