New York, May 16 - Energy Future Holdings Corp. is seeking court approval on $1,995,000,000 of debtor-in-possession financing and the use of cash collateral, according to a May 15 motion with the U.S. Bankruptcy Court for the District of Delaware.
Specifically, the facility includes $1.9 billion in tranche A new money financing and $95 million in tranche B notes to be borrowed in the form of a closing fee payable to commitment parties upon entry of an order allowing the financing.
| The opportunity to fund the second-lien DIP facility is being granted to substantially all of the Energy Future debtors' unsecured creditors, including holders of | senior toggle notes and some holding company | notes, as well as Fidelity Investments and | some affiliates through an unregistered offering.
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| Additionally, some senior toggle noteholders and selected partners and transferees agreed to backstop the full $1.9 billion DIP facility in the form of tranche A2 notes.
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| Cortland Capital Market Services LLC is the administrative and collateral agent.
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| The facility will mature on the earliest of 24 months from the closing date, the effective date of any reorganization plan, consummation of a sale of substantially all of the company's assets and the termination of any outstanding commitments within the terms of the second-lien intercreditor agreement.
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| Base interest on the tranche A notes will be 8%, payable in cash, and the tranche B notes will be interest free. Also, the interest rate on the tranche A notes will increase by 4%, payable in kind, if | an Oncor tax-sharing agreement amendment is not approved by July 27.
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| The company intends to use the proceeds of the financing, cash on hand and its first-lien DIP financing of $5.4 billion to repay the second-lien notes.
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| The second-lien repayment will replace the high-interest-rate second-lien notes with a lower interest rate, saving the company about $8 million per month in interest payments, according to the motion.
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| The second-lien facility is mandatorily convertible to roughly 64% of the equity in reorganized Energy Future Holding upon the effective date of a plan.
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| A hearing is scheduled for June 5.
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| Energy Future, a Dallas-based power generation company and utility operator, filed for bankruptcy April 29. The Chapter 11 case number is 14-10979.
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