IPPs and Merchant Energy Co.s Message Board

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Strategies & Market Trends : IPPs and Merchant Energy Co.s

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To: Larry S. who started this subject	12/26/2002 12:14:47 PM
From: KyrosL	Read Replies (2) of 3358

Reestablished an ILD position. ILD is a senior unsecured ILA bond that trades in the NYSE. It sells for little more than 50 cents on the dollar, yielding 18%. ILA is currently attempting to return to its regulated utility roots by trying to eliminate all traces of its misadventure with trading. The key problems are long term gas supply contracts and tolling agreements that represent an aggregate pre-tax cash drain of around $240 million annually. In a bankruptcy the tolling contracts are below the senior unsecured debt, so the debt at a bit more than 50 cents on the dollar is pretty safe, IMO. The main culprit of this mismanagement has resigned from the CEO position earlier this year and was replaced by his brother who has a better prior record as CEO, although he was the Chairman of the Board throughout ILA's misadventure into the world of Enron. Kyros

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