Dynegy Holdings LLC Bonds (DYN.HQ)

[56Chevy]

UPDATE: Dynegy, Key Creditors Ink Preliminary Bankruptcy Deal

Date :04/04/2012 @ 12:19PM
Source :Dow Jones News

Dynegy Holdings LLC said Wednesday that it has reached an agreement in principle with nearly all its creditor groups on a debt-restructuring plan, less than a month after an independent examiner's denunciation of the power provider's pre-Chapter 11 asset shuffles sent the case careening toward possible calamity.

The proposal would reshift Dynegy's coal assets, which were transferred to shareholders of its parent, Dynegy Inc. (DYN), before the bankruptcy filing, back to creditors, meaning public stockholders of Dynegy's parent would likely be all but wiped out.

Under the preliminary pact, the holding company's unsecured creditors would get a 99% stake in the parent company. Current shareholders initially would receive 1%, plus warrants to potentially boost the stake to 13.5% over five years.

Dynegy said the settlement includes a key deal with U.S. Bank, the representative of holders of bonds secured by leases of Dynegy's power plants that had sued over the asset transfers.

Under the terms of that part of the settlement, creditors with those bonds will receive half of the proceeds from the sale of the plants, with a cap on their total recovery set at $571 million. While it's unlikely the plants would sell for enough to hit that maximum value, Dynegy's previous plan would have given them much less.

<read more>

http://ih.advfn.com/p.php?pid=nmona&article=51904837