TXU talks $4.5 billion two-part cash-pay notes; pricing set for Wednesday

By Paul A. Harris

St. Louis, Oct. 22 - Underwriters set price talk on Monday for the combined $4.5 billion of senior cash-pay notes that are part of the TXU Corp. leveraged buyout financing, according to an informed source.

Texas Competitive Electric Holdings (TCEH) set talk for its $2.5 billion tranche of eight-year notes (B3/CCC) at the 10¼% area.

Goldman Sachs & Co., Morgan Stanley, Citigroup, JPMorgan, Lehman Brothers and Credit Suisse are joint bookrunners for the Texas Competitive Electric Holdings notes.

Meanwhile on Monday Energy Futures Holdings set talk for its $2 billion tranche of 10-year notes (B3/CCC+) at 50 to 75 basis points behind the TCEH notes.

Morgan Stanley, Goldman Sachs, Citigroup, JPMorgan, Lehman Brothers and Credit Suisse are joint bookrunners.

Both tranches are being marketed via Rule 144A with registration rights and are expected to price on Wednesday.

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

TXU is a Dallas-based energy company.

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

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