Texas Competitive selling term loan B-3 at par

By Sara Rosenberg

New York, Oct. 29 - Texas Competitive Electric Holdings Co. LLC (TXU) announced on Monday that it is now taking orders on a minimum $3 billion portion of its $6 billion seven-year term loan B-3 at par, according to a market source.

The term loan B-3 is priced at Libor plus 350 basis points and is non-callable for three years.

Books close Tuesday at 3 p.m. ET for allocation thereafter.

The final allocation amount will be subject to market demand.

The amount of term loan B-3 not sold at this time will be subject to the Most-Favored-Nation language that was added to the tranche the other week.

The term loan B-3 is part of the company's $24.5 billion senior secured credit facility (Ba3/B+), which also includes a $7 billion seven-year term loanB-2, a $3.45 billion seven-year term loan B-1, a $4.1 billion seven-year final maturity delayed-draw term loan, a $1.25 billion seven-year deposit letter-of-credit facility and a $2.7 billion six-year revolver, with all of these tranches priced at Libor plus 350 bps as well.

Up until now, the only tranche that was syndicated was the term loan B-2 and that was sold at a discount of 99¾ and carries soft call protection of 103 in year one, 102 in year two and 101 in year three.

Under the facility, the company must maintain a maximum secured leverage ratio of 7.25 to 1.00 beginning on Sept. 30, 2008.

Citigroup, JPMorgan, Goldman Sachs, Lehman Brothers, Morgan Stanley and Credit Suisse are the joint lead arrangers and bookrunners on the deal, with Citi the administrative agent, JPMorgan as syndication agent, and Credit Suisse, Goldman, Lehman and Morgan Stanley the co-documentation agents.

Proceeds from the credit facility were used to help fund the recently completed leveraged buyout of TXU Corp. by an investor group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group for $69.25 per share. The transaction was valued at $45 billion.

In connection with the buyout, TXU, a Dallas-based energy company, changed its name to Energy Future Holdings Corp.

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