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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (52343)	12/29/2000 2:37:23 PM
From: AllansAlias	Read Replies (1) \| Respond to of 436258

Yes, BC and I were discussing this just this morning. in the timeframes that I watch things for the futures trading, COMPX has always been first to take out an obstacle in the last two days, ergo, trash is ruling.

To: pater tenebrarum who wrote (52343)	12/29/2000 2:42:29 PM
From: AllansAlias	Read Replies (1) \| Respond to of 436258

Watch here... smell of rally... edit: I will not allow myself to bet on it on such a day though.

To: pater tenebrarum who wrote (52343)	12/29/2000 2:46:08 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 436258

SoCalEdison gets $419 million in munis pooted back to them (I LOVE this story, it just keeps getting worse and worse!) quote.bloomberg.com 12/29 12:53 California's Edison Buys Back $419 Mln Muni Bonds (Update1) By Dennis Walters Rosemead, California, Dec. 29 (Bloomberg) -- Southern California Edison got to borrow money on the cheap for years because it gave investors in some kinds of bonds the option to sell the bonds back to the company. Now, nervous investors are taking them up on that option. The main unit of Edison International Inc. said it had to repurchase about $419 million of pollution-control bonds ``that could not be remarketed'' because of its weakened financial condition, according to a filing with the Securities and Exchange Commission late Tuesday. The $550 million in variable-rate bonds, sold on Edison's behalf by a state pollution-control authority during the 1980s and 1990s, pay some of the lowest interest rates in the tax-exempt market, averaging less than 4 percent. Investors accept the lower rates in exchange for the right to sell the bonds back to the issuer at the full face amount, often on a daily or weekly basis. Edison's mounting losses and possible credit-rating cuts are among the troubles prompting investors to sell their variable-rate bonds back to the utility. ``We just didn't feel comfortable holding'' the bonds amid uncertainty over California's power problems and concerns about Edison's declining cash balances, said Todd Pardula. He oversees $780 million in two California tax-exempt money market funds at American Century Investments in Mountain View, California. Edison and Pacific Gas & Electric, the other major stockholder-owned utility in California, face possible bankruptcy as their soaring costs of buying electricity far exceed what they're allowed to charge business and residential customers when reselling the power. Pardula said his funds sold off their last stake of Edison variable-rate debt earlier this month, a far cry from the past, when they held as much as $20 million of such bonds. Accursed Put Option Edison's inability to resell the tendered bonds to other investors reflects the increasing difficulty faced by the two big utilities in the short-term debt markets. Both utilities sold variable-rate bonds in rosier times, when it was less risky to give investors the option to sell back the bonds. Now, reflecting the greater risk, Edison's variable-rate bonds are yielding closer to 6 percent on a tax-exempt basis. That translates to almost an 11 percent taxable equivalent yield for an investor in the top federal and state tax brackets. Edison and Pacific Gas & Electric, the main unit of PG&E Corp., have been hit with $8.1 billion of losses tied to soaring power costs, and are asking regulators to allow them emergency power-rate increases in order to stay solvent. Though most bonds sold by investor-owned utilities pay taxable interest, utilities can sell tax-exempt debt for certain purposes specified under federal tax law, such as improvements that reduce pollution. The California Pollution Control Financing Authority, for example, sold these bonds on behalf of both Edison and PG&E. Variable-Rate Popularity Variable-rate bonds have grown in popularity among cities, counties and other sellers of tax-exempt debt because rates have stayed well below traditional fixed rates for 20-year or 30-year bonds. One measure of tax-exempt variable rates, the Bond Market Association Municipal Swap Index, recently showed the variable rate averaging 3.6 percent over the last 10 years. Long-term muni fixed rates often were closer to 6 percent during that time. Variable-rate bonds are popular with tax-exempt money market funds for managing investor redemptions because they can be converted to cash quickly. Under normal market conditions, bond dealers often can remarket the debt to other investors when bonds are ``put'' back. As a backup, many muni issuers have bank letter-of-credit providers in place that can repurchase the bonds. Acting Quickly Larger issuers, including Edison, sometimes dispense with these backups if they maintain large cash positions. That made Pardula more anxious not to delay using the option while Edison's situation worsened. ``If it had (a letter-of-credit backup) on it, we wouldn't be as concerned'' because the bond repurchase would hinge on a bank's resources, not the utility's cash position, Pardula said. Edison, in its SEC filing, said it was able to tap bank lines of credit last week to repurchase the pollution-control bonds. Another $131 million of pollution-control bonds still could be tendered for repurchase, Edison added. The utilities' problems also are affecting the rest of the California variable-rate debt market, with investors driving up prices -- and lowering yields -- as they put money into other high- grade variable-rate credits. Variable rates often shoot up at the end of the year, partly because investors make year-end tax payments and force funds to sell more bonds than usual. That phenomenon isn't as strong this year, Pardula said, with California variable-rate bonds staying around 4 percent. Figures weren't immediately available on how many Pacific Gas & Electric variable-rate bonds are being repurchased by the utility or its bank guarantors. Records compiled by the Municipal Securities Rulemaking Board show active trading in many such bonds this month.