Moody's rates Texas Competitive notes B2

Moody's Investors Service said it affirmed Energy Future Holdings Corp.'s Caa2 corporate family and probability of default ratings at Caa3, senior secured notes rating at Caa3 (LGD 4, 62%), senior unsecured guaranteed notes rating at Ca (LGD 5, 81%), senior secured (legacy) notes rating at Ca (LGD 5, 85%) and speculative grade liquidity rating at SGL-4.

Moody's also said it affirmed Texas Competitive Electric Holdings Co. LLC's senior secured first-lien credit facility at B2 (LGD 2, 15%), senior secured second-lien rating at Caa3 (LGD 3, 44% revised from LGD3, 43%), senior unsecured guaranteed notes rating at Caa3 (LGD 4, 54% revised from LGD 4, 52%) and senior unsecured (legacy) PCRB notes at Ca (LGD 4, 65%).

The agency also said it affirmed Energy Future Intermediate Holdings' senior secured notes rating at Caa3 (LGD 4, 62%), Energy Future Competitive Holdings' senior secured facilities notes rating at Caa3 (LGD 4, 69%), Oncor Electric Delivery Co.'s senior secured rating at Baa1.

The agency said it assigned a B2 rating (LGD 2, 15%) to Texas Competitive's senior secured first-lien notes. The agency said it downgraded a single class of Texas Competitive's senior secured second-lien notes due April 2021 to Caa3 from Caa2

The outlook was changed to stable from negative.

The outlook revision reflects two primary benefits associated with a recently announced Texas Competitive senior secured amend-and-extend transaction, combined with its new senior secured note offering, Moody's said.

The most important benefit is near-term financial covenant relief, which eliminates a potential covenant violation in the second half of 2011, the agency said.

The second benefit is a three-year maturity extension for the Texas Competitive's senior secured first-lien notes, which mature in October 2014, Moody's said.

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