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Energy Future Holdings D.I.P. Revisions Approved

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According to the U.S. Bankruptcy Court docket. the Court issued an order approving the collective motion of Energy Future Holdings, Energy Future Intermediate Holding (EFIH) and EFIH Finance for entry of (a) an order (i) authorizing the partial repayment of EFIH second lien notes (i.e., authorizing EFIH to use up to $750 million of its cash on hand to repay outstanding principal and accrued interest on the EFIH 11% and 11 3/4% Second Lien Notes due 2021 and 2022, respectively); (ii) approving EFIH’s D.I.P. consent and (iii) authorizing the consent fee (i.e., authorizing the payment of a cash consent fee of up to $13.5 million to the consenting lenders under the EFIH D.I.P. facility in exchange for EFIH D.I.P. consent) and (b) a revised EFIH first lien D.I.P. order.

As previously reported, “The Partial Repayment, and the facilitating DIP Modifications and Consent Fee, are a sound exercise of the EFIH Debtors’ business judgment and in the best interests of their respective estates. The Debtors project that EFIH will have approximately $1.13 billion of cash on hand as of March 31, 2015. EFIH’s only periodic cash expenses during the case are interest expense on the EFIH DIP Facility and professional fee administrative expenses. Meanwhile, the EFIH Second Lien Notes accrue interest at a weighted average rate of approximately 11.61% per year. As with the repayment of the EFIH First Lien Notes, which this Court previously approved, the EFIH Debtors will create significant value by partially repaying the EFIH Second Lien Notes. Specifically, by using $750 million to repay in part the EFIH Second Lien Notes, the EFIH Debtors can prevent an estimated $66 million in accrued postpetition interest claims through December 2015. In light of these estimated savings, agreeing to a Consent Fee of up to $13.5 million, which is payable upon entry of the Repayment Order and the Revised DIP Order (unless stayed), is a sound financial decision. At the same time, EFIH will maintain adequate cash on hand after consummating the Partial Repayment, taking into account projected case expenses.”

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