From the Nov 22 8-K--
TXU Energy has signed an agreement to issue $750 million of exchangeable subordinated notes to funds affiliated with DLJ Merchant Banking Partners III, L.P. The transaction is expected to close on or about November 22, 2002 subject to the satisfaction of various closing conditions. The net proceeds will be used to repay debt and for other general corporate purposes.
The notes will mature in ten years, bear interest at the rate of nine percent per annum and permit the deferral of interest payments. The notes may be exchanged at any time for TXU Corp. common stock at an exercise price of $13.15 per share. The number of shares of TXU Corp. common stock that may be issuable upon the exercise of the exchange right is determined by dividing the principal amount of notes to be exchanged by the exercise price. On the basis of the current outstanding amount of TXU Corp. common stock, the shares to be issued would represent approximately 17 percent of the TXU Corp. common stock on a fully diluted basis. The exercise price and the number of shares to be issued are subject to anti-dilution adjustments.
The notes are subordinated to all other TXU Energy obligations. TXU Energy has the right to require the holder of the notes to exchange its interest in the notes for a preferred equity interest in TXU Energy with economic and other terms substantially identical to the notes. TXU Energy has 180 days after the closing to consummate such an exchange.
The noteholders will have the right to designate one member on the board of managers at TXU Energy and the right to nominate for election one board member to the TXU Corp. board of directors.
Apparently from the filing Buffet took a 1/3 of this position from DLJ.
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