Global law firm White & Case LLP has advised Deutsche Bank AG New York Branch, as administrative and collateral agent, on the closing of US$4.25 billion of senior secured "exit" credit facilities to Tex Energy, successor to Texas Competitive Electric Holdings (TCEH). The US Bankruptcy Court for the District of Delaware confirmed TCEH’s plan of organization on August 29, 2016, and the plan went "effective" on October 3, 2016.
The credit facilities included a "roll-to-exit" feature, which allowed TCEH to convert its existing debtor-in-possession (DIP) financing into long-dated exit facilities upon the satisfaction of certain conditions at emergence from bankruptcy.
"The roll-to-exit feature is still relatively uncommon for DIP financings but offers substantial benefits to debtors in bankruptcy," says Eric Leicht, Head of White & Case's Americas Banking section, who advised Deutsche Bank. "In this case, the company was able to cut market risk by pre-wiring the DIP financing to convert automatically upon its exit from bankruptcy into long-term debt with pre-agreed pricing and other favorable terms–in essence, pre-syndicating its financing needs at a time when the capital markets were strong."
The White & Case deal team consisted of Leicht, Eliza McDougall, Harrison Denman, Andrew Ambruoso, Rob Morrison, William Prins and Jeb Byrne.
Under TCEH's bankruptcy plan, Apollo Global Management LLC and other pre-petition first-lien lenders will take ownership of Tex Energy. TCEH, affiliated with TXU, was a part of one of the largest bankruptcies of the decade, following on the heels of a US$45 billion leveraged buyout (LBO) of TXU in 2007, the largest LBO in history.
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