TLN 6 ½ 06/01/25 Corp & TLN 10 ½ 01/15/26 Corp

Talen Energy Supply LLC

Credit, Event Driven/Special Sit, Energy


Publicly traded companies mentioned herein: Vistra Corp (VST)

Highlights

The speaker is long the outstanding unsecured notes of Talen Energy Supply LLC (TES) and its recently approved equity rights offering. In May 2022, TES and certain of its affiliates filed for Chapter 11 protection in the Bankruptcy Court in order to reduce its approximately $3.2B of outstanding long-term debt. The company explained that it was caught between rising natural gas prices and falling electricity rates leading to the bankruptcy filing. TES had used derivative contracts to limit its exposure to commodity price volatility risks, but the company ended up being forced to provide more cash collateral to its counterparts as prices jumped in 2021, according to court papers.

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