Energy Future Holdings debt issue could prepare for bankruptcy filing

Bloomberg News has a report suggesting that Dallas-based Energy Future Holdings' issuance of $850 million in new bonds earlier this month could the a setup for a bankruptcy filing by its unregulated unit, Texas Competitive Electric Holdings, which includes Luminant Generation and TXU Energy, a retailer. Several debt analysts told Bloomberg the company faces unsustainable debt levels from its 2007 leveraged buyout of the former TXU Corp. by investment groups. The most recent bonds will be used to pay off a loan to EFH from Texas Competitive. Eliminating that liability could allow Texas Competitive to file for bankruptcy while protecting parent EFH and also Oncor Electric Delivery, EFH's regulated utility. The story is here.

-- Jim Fuquay