Energy Future Holdings Corp Value DROPPED AGAIN by 4 BILLION DOLLARS - Why Should Taxpayers Back a Loan for them? Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas

Nuclear Power Plants a POOR INVESTMENT

Energy Future Holdings Corp Value DROPPED AGAIN by 4 BILLION DOLLARS - Why Should Taxpayers Back a Loan for them?

13 October 2010 at 9:34:14 AM

Energy Futures Holdings is in financial distress. Because the price of natural gas has gone down, EFH had to lower the value of their holdings by 4 billion bucks.  Last year, EFH had to devalue their company by NINE billion dollars. From the DMN

Private equity investors TPG and Kohlberg Kravis Roberts & Co. bought EFH in 2007 and loaded the company with $40 billion in debt in a deal that was a bet that natural gas prices would rise.

Oops. That was not a good bet, now, was it?

AFTER Energy Future Holdings came out with those numbers, Moody Investment Services downgraded EFH's debt from Caa1 to Caa2. What is that?  From Wikipedia

Caa1, Caa2, Caa3

Moody judges obligations rated Caa as of "poor standing and are subject to very high credit risk",[7] and have "extremely poor credit quality. Such banks may be in default..."[8]

Oh. Poor Standing and High Credit Risk. I know. Let's Get the TAXPAYER to cover our High Credit Risk. I'll just get some lobbyists to head to the Us Government and get people like Chet Edwards to push for the risk to be put on the BACKS of the taxpayer.

Let's recap.

  • Investors don't want to put their money into nuclear power plants. Why? Because it's a RISKY INVESTMENT.
  • What can a company do that wants to get investors, CAN'T GET INVESTORS because the investing services WARN them off from putting their money into them? Why, go to the US government and tell THEM they want to have the TAXPAYER guarantee loans.
  • What does that mean, to have the taxpayer guarantee a loan? It means if EFH/Luminant can't pay off the costs (which are going to be huge) of the loan the government is taking out FOR a private company, the taxpayer will pay it off. ie, CORPORATE WELFARE. Can you say SUCKER!!!!

I heard a guy running for office the other day say that he wanted limited government, including limited or no government regulation. I'm curious if the same people who want hands-off on government regulating business also have the same scruples when it comes to their taking their hands OUT of taxpayers pockets!

Anyway, the KKR people are RICH. Not rich like people in Somervell County might be that have some money but INCREDIBLY RICH. 

We said back in 2008 that they bought TXU in order to beef up some of the assets and then sell it off. They were WILLING to take on some extra debt at that point because they figured the natural gas prices would rise, increase the value and then they could find a new buyer. That's what they do. And, because they know that the taxpayers are SUCKERS, since they aren't getting investors to put THEIR money into Luminant, etc, they'll get taxpayers to pay for THEIR company and pick up the slack if they default.


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