Energy Future Holdings Launches New Debt Swap

(Reuters) – Energy Future Holdings Corp on Friday launched a new debt exchange as the energy company seeks to reduce its heavy debt load and high interest expense, caused by its leveraged buyout in 2007

The Dallas, Texas-based company offered to exchange its 11.25 percent pay-in-kind notes due 2017 and 10.875 percent bonds due 2017, which have a total par value of around $4.5 billion, for up to $2.18 billion in new 10 percent notes due 2020 and $500 million in cash.

Bondholders that participate in the exchange would receive between 67 cents and 78.75 cents on the dollar in new debt, and 2.5 cents on the dollar in cash.

The company’s 11.25 percent bonds rose 1.25 cents on Friday to 67.25 cents and the 10.875 percent bonds fell almost 2 cents to 72.3 cents, according to MarketAxess.

The energy company, formerly known as TXU Corp, added $24 billion in debt to fund its 2007 purchase by Kohlberg Kravis Roberts & Co KKR.UL and Texas Pacific Group TPG.UL. (Reporting by Karen Brettell; Editing by Eric Walsh)