Weekly Downgrade Wrap-Up
As usual, we have a week's worth of ratings actions on the debt of LBO-backed companies from Standard & Poor's Ratings Services and Moody's Investors Service. This week was relatively slow, with the big news coming from the largest LBO of all time, KKR and TPG's buyout of TXU (now known as Energy Future Holdings). The Texas-based energy giant proposed a distressed debt exchange which will reduce its obscene debt load from $44 billion to $42 billion. Naturally the move warranted a downgrade from both Moody's and S&P. Moody's expressed concerns over "looming maturities" on around $23 billion of debt in 2014, which it said will need to be addressed before 2013. Meanwhile, carbon and mercury legislation threatens the company's "coal-fired margins," Moody's wrote. Read more on the mega-buyout's financial situation below.
