Energy Future looking to deleverage, gain amendments from term lenders

By Jennifer Lanning Drey

Portland, Ore., Aug. 4 - Energy Future Holdings Corp. is focused on its balance sheet and will opportunistically look for ways to deleverage, John Young, chief executive officer of Energy Future, said Tuesday during the company's second-quarter earnings conference call.

Energy Future has about $22 billion of secured debt that needs to be refinanced on or before Oct. 1, 2014.

The company has offered a package of amendments to its secured term loan debt investors under which it is looking to trade $1.25 billion of first-lien accordion debt for an incremental $4 billion of secured debt, Young said.

The result would be additional flexibility for managing the company's 2013 and 2014 maturities as well as any unforeseen business issues, he said.

Energy Future has the support of its core relationship lenders and believes responses received so far from other secured debt investors are encouraging.

Liquidity drops to $3.9 billion

At June 30, Energy Future, excluding its indirect subsidiary Oncor, had liquidity of $3.9 billion.

The figure represented a $600 million reduction from the end of the first quarter due to planned draws on the company's delayed-draw term facility, which is used to fund expenditures related to new plant construction at its Sandow 5 and Oak Grove power plants, Paul Keglevic, chief financial officer of Energy Future, said during the call.

Energy Future posted a second-quarter net loss of $155 million, compared to a net loss of $3.33 billion for the same period in 2008.

The company said the current-year loss included $206 million in unrealized commodity-related mark-to-market net losses that reflect the impact of higher forward natural gas prices on positions in its long-term hedging program.

The 2008 net loss included $3.07 billion in unrealized mark-to-market net losses largely related to the long-term hedging program.

Consistent with its first-quarter results, the company continued to see reduced energy deliveries to large industrial and commercial consumers in the second quarter. However, the reductions were flat with the first quarter, possibly indicating a stabilizing of the downward trend, Young said.

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

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