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Strategies & Market Trends : Value Investing
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To: Softechie who wrote (13772)1/25/2002 8:30:16 AM
From: MCsweet  Read Replies (2) of 78576
 
CPN and MIR vs. DYN

You need deep pockets to operate in the energy biz. Without a good credit rating, you will have to do things like prepay and put up security bonds for all your hedging activities, which will result in cash drains and carrying costs that will eventually run you out of business.

Word on the street is that Calpine is short on credit capacity and may have to quickly unload assets or go bankrupt because it can't handle its credit problems. Dynegy is obviously a much better capitalized player and thus would not be as exposed to credit problems.

Hope that helps.

MC
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