Financial Times FT.com

Groups opt to avoid paying cash on debt

By Henny Sender in New York

Published: November 4 2008 23:57 | Last updated: November 4 2008 23:57

Energy Future Holdings Corp, the former TXU Texas power generator, is joining the growing group of private equity-owned companies taking advantage of the ability to suspend cash interest payments on a portion of its debt.

This is good news for holders of the senior debt, because it means there is more cash for them. In response, the bank loans, the most senior debt, have risen in secondary market trading.

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