Simpson Thacher recently represented Texas Competitive Electric Holdings Company LLC (“TCEH”), a subsidiary of Energy Future Holdings Corp., the company formerly known as TXU Corp., in an amendment of its $24.5 billion credit agreement (the “Amendment”). In the Amendment, TCEH, the borrower under the credit agreement, agreed to reduce its existing first lien accordion capacity by $1.25 billion in exchange for the ability to issue up to an additional $4 billion of principal amount of notes or loans ranking junior to TCEH’s first lien obligations. In addition, the Amendment permits TCEH to, among other things, (i) issue new secured notes or loans, which may include, in each case, indebtedness secured on a pari passu basis with the obligations under the credit agreement, so long as the net cash proceeds from any such issuance are used to prepay certain loans under the Credit Agreement at par or are issued in lieu of TCEH’s remaining first lien accordion capacity, and (ii) seek the agreement of individual lenders to extend the maturity of their term loans or extend or refinance their revolving credit commitments under the credit agreement.
The security agreements and intercreditor agreement were amended and restated in connection with the Amendment. The Amendment became effective on August 8, 2009.
The Simpson Thacher team for this transaction included James Cross, Brian Steinhardt, Jason Hwang and Brett Pearlman (Credit).