S&P may cut TXU debt

Standard & Poor's said it placed its BBB- rating on Brazos River Authority, Texas' revenue debt, issued for TXU Corp. and the DeCordova Bend project, on CreditWatch with negative implications because TXU's corporate credit rating was placed Monday on CreditWatch with negative implications.

The agency said it placed TXU on watch based on the potential for a buy-out of the company by an investor group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group.

The placement reflects the likelihood that the acquisition will result in more debt and higher financial obligations for TXU, S&P said, which could lead to the company's downgrade. The CreditWatch will be resolved before the consummation of the transaction and following an analysis of management's initial plan of capitalization and strategy.

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