Energy Future adds delayed-draw DIP, removes conversion to exit loan

By Sara Rosenberg

New York, June 21 – Energy Future Intermediate Holding Co. LLC added an $825 million debtor-in-possession delayed-draw term loan to its transaction and removed the option for its proposed $5,475,000,000 DIP facility due June 2018 to convert and be reduced to a $4 billion seven-year covenant-light term loan upon exit from bankruptcy, according to a market source.

Also, pricing on the DIP loan was increased to Libor plus 300 bps from Libor plus 275 bps, the Libor floor was lifted to 1% from 0% and the original issue discount tightened to 99.875 from 99.75, the source said.

The delayed-draw DIP is available for 90 days following entry of the final order with up to two draws with a minimum size of $200 million. Drawings will become fungible with the DIP term loan.

The company will refresh point-in-time ratings. The DIP has a 25 bps step-up if ratings are not refreshed within 30 days of close, another 25 bps step-up if ratings are not refreshed within 60 days of close and another 25 bps step-up if ratings are not refreshed within 90 days of close. The pricing step-up will be in effect until ratings are refreshed.

Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc. are the joint lead arrangers on the deal.

Commitments are due at noon ET on Friday, the source added.

The court hearing is Monday and closing is expected after court approval.

Proceeds will be used to refinance an existing $5,475,000,000 DIP, to pay DIP interest and to pay restructuring fees and expenses. The delayed-draw term loan can be used to fund additional liquidity and/or refinance pre-petition first-lien make-whole settlement claims.

Energy Future is a Dallas-based power generation company and utility operator.

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