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Reuters: Energy Future Holdings’ Second Lien Bondholders Vie to Control DIP

May 30, 2014, 07:23 AM
Filed Under: Bankruptcy

Reuters reports that a lender call was scheduled to market an alternative $1.9 billion second-lien debtor-in-possession (DIP) financing for Energy Future Intermediate Holdings (EFIH), a subsidiary that owns the regulated business for bankrupt power company Energy Future Holdings, sources said.

The Reuters article notes a group of second-lien EFIH bondholders is supporting this financing to compete against a $1.9 billion second-lien DIP proposal initially advanced by a group of unsecured EFIH bondholders at the outset of Energy Future's Chapter 11 case.

Whichever parties prevail and control the junior DIP financing could end up owning most of Energy Future. The newly proposed second-lien DIP pays a 7 percent coupon and comes due in two years. At maturity, the DIP converts into 62 percent ownership of post-bankruptcy Energy Future.

JP Morgan is acting as agent for the alternative second-lien EFIH bondholder DIP.

To view the Reuters article in its entirety, click here.

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