Ooops. Fitch Lowers Issuer Default Rating (IDR) of Texas Competitive Electric Holding CompanySomervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas

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Ooops. Fitch Lowers Issuer Default Rating (IDR) of Texas Competitive Electric Holding Company

5 April 2012 at 7:29:48 PM

From Business Wire

Fitch Ratings has lowered the Issuer Default Rating (IDR) of Texas Competitive Electric Holdings Company LLC (TCEH) to 'CC' from 'CCC' and removed the Negative Rating Outlook. According to Fitch's Rating definitions, a 'CC' rating implies very high levels of credit risk such that default of some kind appears probable at some point in the future. On the other hand, a 'CCC' rating implies substantial credit risk such that default is a real possibility. Due to inter-company linkages, Fitch has also downgraded the IDRs of Energy Future Holdings Corp (EFH), Energy Future Intermediate Holding Company LLC (EFIH) and Energy Future Competitive Holdings Company (EFCH) to 'CC' as well. The IDR and security ratings of Oncor Electric Delivery Company LLC (Oncor) are unaffected by today's rating actions.


Liquidity may not be a concern until 2014 given the current ability to issue $500 million first-lien and $1.3 billion second-lien debt at EFH/EFIH. TCEH has the ability to issue $750 million of first-lien debt at TCEH and $1.88 billion of second-lien debt, of which $1 billion can be issued for cash. TCEH has unlimited ability to issue first-lien debt for refinancing purposes. Fitch's forecasts include an increase in leverage from an already untenable level due to a need for higher borrowings to fund operations.

TCEH's near-term debt maturities are significant including the $645 million unextended portion of the revolving credit facility in October 2013, the $3,851 million unextended portion of term loans and deposit letter of credit (LOC) loans in October 2014 and the $4,693 million of cash pay/PIK toggle notes in 2015/16 (which excludes approximately $363 million of notes held by EFH and EFIH). The debt maturity schedule could be exacerbated by the springing maturity provision for the extended portions of the term loans and deposit LOC loans if the requisite conditions are not met. Volatile capital market conditions and weakened fundamental outlook could hamper the company's ability to execute refinancings on a timely basis. EFH has over $1 billion of debt maturities over 2014-17 and, in Fitch's view, would need to preserve a substantial portion of its debt issuance capacity for debt repayments.


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1 - Anonymonous   6 Apr 2012 @ 10:40:32 PM 

Let 'em go busted.  Not for us(the peasants) to bail out.

2 - Eddy Voss   16 Jan 2016 @ 7:31:56 AM 
Nice post . I was fascinated by the analysis , Does anyone know if my business can get ahold of a sample NJ Residential Lease Agreement example to use ?


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