There have been lots of rumors about the TXU deal. On? Off? One rumor held that the banks pledging to do the financing have offered a break-up fee. Such talks have been denounced, and Citigroup says it is still willing to provide the financing (about $32 billion will need to be raised). But you have to wonder if there is some truth to the gossip. Citigroup, just like other banks, has been forced to make good on a lot of bridge loan commitments. That is not going to be moved anytime soon, unless the markets miraculously reflate. So if it wants to make good on its word and avoid another bridge loan, it will have to tinker with the terms. It will have to offer a nice rate and lots of built-in protection. It will likely find buyers, but with a lot of covenants sprinkled through. Even then, it may be hard. So this is a bellwether sort of deal. Stay tuned.  

For more:
- here's an AP article