Potential buyers for Oncor may include FPL Group Inc., CenterPoint Energy Inc. and Pepco Holdings Inc., although one banker said it's "hard to do the math" given the parent company's overleveraged state.

One analyst estimated Oncor, which is already 20% owned by the infrastructure arms of the Ontario Municipal Employees Retirement System and the Government of Singapore Investment Corp. Pte. Ltd., would only fetch $6.5 billion to $7 billion net of debt. "It's not worth as much in a restructuring as it would be if the sale were not under pressure," the analyst said.

Oncor, which generates more than $1.7 billion in annual Ebitda, will release its fourth-quarter and 2012 operational and financial results on Feb. 19.

Kirkland & Ellis LLP's Rick Cieri is leading the legal team advising Dallas-based EFH on its restructuring options and Roger Altman is doing the same from Evercore Partners Inc., a person familiar with the matter said. Raffiq Nathoo and Steven Zelin, senior managing directors at Blackstone Group LP, are thought to be assisting the private equity group, which includes Kohlberg Kravis Roberts & Co. LP, TPG Capital and Goldman, Sachs & Co. Miller Buckfire & Co. LLC is said to be advising Oncor.

EFH company spokesman Allan Koenig wouldn't comment on the company's restructuring or its advisers. Kirkland & Ellis, KKR and TPG didn't respond to requests for comment.

None of the major investment banks are angling for advisory roles because if the company goes into bankruptcy, they can't be lenders, one banker said. The source said EFH is trying to do as much negotiating over debt terms as it can pre-filing, but it won't be a straight prepack because it's too complex. Although one source is expecting the company to file in the fourth quarter of 2014, others said it could happen as early as the end of this year.

EFH units Texas Competitive Electric Holdings and Energy Future Competitive Holdings are expected to run into a liquidity deficit in mid-2014, according to a report from Moody's Investors Service.

Another banker said most of the large investment banks are working on potential buyers for pieces of EFH, including Oncor.

CreditSights Inc. analysts Andy DeVries wrote in an e-mail that the only debt that felt the effects of the reorganization news was the unsecured debt.

"The unsecured that fell were grossly overvalued in the first place as everybody already knew," he wrote.

Instead, DeVries wrote, the smart money is behind the extended term loans, which is the bulk of the company's debt, and which haven't experienced a price decline. "But the reality is mgt [management is] trying to knock the nonextended lower to get better extend terms," DeVries added.

A potential bankruptcy of the former TXU Corp., which has been hit by low natural gas prices, would tarnish the reputation of big leveraged buyouts. When the $45 billion deal was announced in 2007, it was the largest at the time. KKR, TPG and Goldman paid about $32 billion in equity and assumed about $13 billion in debt in the deal.

EFH and its subsidiaries combined had $45 billion in total gross debt as of Sept. 30, according to a company presentation. EFH had $3.7 billion in debt, Energy Future Intermediate Holding had $5 billion in debt and Energy Future Competitive Holdings had $100 million in debt. Oncor is holding $6.4 billion in debt and Texas Competitive Electric Holdings Co. LLC had $29.8 billion in debt.

Not only is the debt burden huge, but EFH and its units are also facing debt maturing in the near term. EFH's $92 million in 5.55% senior unsecured note matures Nov. 15, 2014, while Texas Competitive Electric Holdings has a $3.8 billion senior secured first-lien term loan and a $42 million senior secured first-lien letter of credit facility, both maturing Oct. 10, 2014, and a $5 million 7% senior note due March 15, 2013.

Texas Competitive Electric Holdings' next large interest payment occurs in May 2013, "which is now a key milestone," Moody's analyst James Hempstead wrote in a Jan. 3 report.

But Oncor, which is 80% owned by a holding company, which is, in turn, owned by Energy Future Intermediate Holding, isn't facing the same dire circumstances, according to Moody's. Oncor's robust upstream dividends and tax payments over the next few years will support the parent company's debt obligations, the ratings agency said. That could insulate Oncor from being included in the restructuring effort, leaving it as a potential takeover target.

The $3.8 billion senior secured first-lien term loan is trading at a spread of 69.25 to 70.25, according to data provided by Bloomberg News. The debt is priced at Libor plus 350 basis points. Citigroup Inc. was the lead arranger and JPMorgan Chase & Co. acted as the syndication agent.

Moody's expects a material restructuring to take place for Energy Future Holdings units Texas Competitive Electric Holdings and Energy Future Competitive Holdings within the next 12 months, because of "financial distress and untenable capital structures," according to a Feb. 4 report.

But Moody's said the timing of the restructuring was uncertain due to strategic legal prepositioning and a desire to capture the economics of potential future natural gas and power price increases.

However, the tone of its restructuring is important for its success, Moody's said, noting "a disorganized proceeding would introduce value destruction, especially with its retail electric provider business."

Texas Competitive Electric Holdings, which has a $13 billion to $17 billion enterprise value, and Energy Future Competitive Holdings' lenders would ultimately end up owning 90% of the company's equity through a restructuring, Moody's said.