Energy Future to use PIK option on toggle notes, given uncertainties

By Jennifer Lanning Drey

Portland, Ore., May 1 - Energy Future Holdings Corp. has elected to use the pay-in-kind feature on its toggle notes for the May 1 and Nov. 1, 2009 interest payments due to uncertainty regarding access to the capital markets and the general economic weakness, Paul Keglevic, chief financial officer of Energy Future, said Friday during its first-quarter earnings conference call.

"While we believe we have sufficient liquidity to meet our anticipated ongoing needs, the uncertainties around the recovery of commodity markets and the duration of the economic recession are substantial," Keglevic said.

The company's decision on whether it will use the pay-in-kind option for the May 2010 interest payment must be made by Nov. 1, 2009 and will be based on market conditions and other relevant factors at the time, he said.

At the end of the first quarter, Energy Future, not including its indirect subsidiary Oncor Electric Delivery Co. LLC, had liquidity of $4.5 billion.

The company posted an adjusted net loss of $265 million, compared with an adjusted net loss of $243 million for the first quarter of 2008. Key drivers of the $27 million decrease in earnings included the effects of milder weather and the weaker economy on revenues, as well as higher transmission and other operating costs.

"It continues to be a difficult business environment, and we are not immune to the challenges presented by depressed commodity markets, dislocated capital markets and a contracting economy," John Young, the company's chief executive officer, said during the call.

Energy Future Holdings is a Dallas-based energy holding company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.