CEO: Exelon Monitoring Enron Problems,But No Changes Yet
30 Oct 09:00
By Jon Kamp
Of DOW JONES NEWSWIRES
(This article was originally published Monday.)
CHICAGO (Dow Jones)--Exelon Corp. (EXC) hasn't made specific moves to lower
its trading operation's exposure to Enron Corp. (ENE), but it's carefully
evaluating dealings with Enron in light of the trading giant's recent troubles,
a top Exelon official said Monday.
"We have been very careful to check all of our trades with them to make
certain that we're reasonably secure," John Rowe, co-chief executive officer of
Chicago-based Exelon, said following a speech at an energy conference.
"Obviously we're concerned that if they have big problems, it would really
shake up the market. But I don't think that we have out-of-control exposure or
anything."
Confidence in Enron's financial situation was shaken after the company
disclosed a $1.2 billion reduction in shareholder equity related to
controversial transactions with entities connected to former Chief Financial
Officer Andrew Fastow. Enron's investment-grade bonds are trading at levels
traditionally associated with distressed debt, and on Monday, Moody's Investor
Services downgraded its long-term debt ratings on Enron to two levels above
junk-bond status.
Moody's cited a loss of investor confidence associated with Enron's troubles
as one reason for the downgrade. Enron shares closed Monday at $13.81, down
$1.59, or 10%, on above-average volume of 36.4 million shares. Enron's shares
are off 60% since mid-October.
Despite Enron's recent problems, Exelon hasn't made specific moves to lower
its risk exposure to the company, Rowe said. He said he doesn't believe Enron's
problems will necessarily grow.
"I am not in a panic over Enron," he said. "Personally, I would be very
surprised if we're looking at some complete collapse there. But very clearly
they weren't quite as ironclad as they wanted the world to believe."
Spokesmen for Reliant Energy Inc. (REI) and Calpine Corp. (CPN) said their
companies hadn't changed their credit policies for deals with Enron. Al Butkus,
spokesman for Aquila Inc. (ILA), another leading trading company, said, "We
watch everybody. We have a tight credit policy, but we don't comment on
individual companies."
Trading volume on EnronOnline, the company's proprietary energy marketplace,
continues to run high, with 7,200 trades late Monday, compared with a 30-day
average of 5,600, said Enron spokesman Eric Thode.
Enron's counterparties aren't placing new restrictions on trade with the
company, Thode said.
A more severe credit-rating drop could change Exelon's perspective, Rowe
said, a sentiment echoed by officials at other large power trading companies.
"We are being careful with the Enron exposure right now," Rowe said.
-By Jon Kamp, Dow Jones Newswires; 312-750-4129; jon.kamp@dowjones.com
(END) DOW JONES NEWS 10-30-01
09:00 AM |
