Fitch to review Energy Future

Fitch Ratings said it expects to review the B- ratings for Energy Future Holdings Corp. once the terms of the company's recently announced exchange offers are finalized.

The outlook is negative.

The company recently launched exchange offers through a subsidiary, Energy Future Intermediate Holding Co. LLC, for the company's 11¼% to 12% senior pay-in-kind toggle notes and 10 7/8% cash-pay senior notes in exchange for up to $2.18 billion of 10% new senior secured notes due 2020 and an aggregate of $500 million in cash.

An exchange resulting in issuance of the full $2.18 billion of new notes and use of $500 million cash would remove about $3.6 billion of old notes, the agency said.

The completion of the exchange offer would slightly reduce the company's debt balances and reduce interest expense, Fitch said, but not enough to significantly improve credit metrics.

The agency said it expects to review the ratings of EFH and the ratings and recovery ratings of the specific instruments involved in the exchange offer when the results of the exchange are known. Progress on refinancing and reducing the large 2014 bank debt maturities is becoming an increasingly important rating consideration as the current capital structure is unwieldy, Fitch said.

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