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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (40786)	1/12/2001 1:31:46 AM
From: Lee Lichterman III	Respond to of 42787

Here are the institutions that will be caught holding if they can't dump before the Calif Power guys declare Bankruptcy....... Thursday January 11, 4:23 pm Eastern Time Mutual funds report exposure to Calif. utilities By Chris Sanders NEW YORK, Jan 11 (Reuters) - Several mutual fund companies with large bond portfolios said they hold only small positions in the quickly souring long-term debt of two California utilities. Standard & Poor's downgraded its ratings on PG&E Corp. (NYSE:PCG - news) last Thursday, pushing several into junk status, and has warned that Edison International's (NYSE:EIX - news) Southern California Edison is on CreditWatch for a possible downgrade. The credit rating agency said both entities are facing imminent default unless California regulators and politicians can immediately craft a viable solution that restores liquidity to the utilities. The nation's most populous state has been pushed to the brink of power blackouts in recent weeks due to tight supplies of electricity. To meet demand, California utilities have been forced to pay skyrocketing prices for wholesale electricity on the spot ???arket and are not permitted to pass them on to consumers under the state's 1996 deregulation law. Below are3/4 Du Dur?? DI IN !? IN DI !? DE??d their holdings data with Reuters. Mutual fund giant, the Vanguard Group, holds an estimated $200 million in debt from the two utilities De???ley Forge, Pa., firm said. The funds are Vanguard Bond Index Fund Total Bond Market (Nasdaq:VBMFX - news), Vanguard Bond Index Fund Short Term Bond (Nasdaq:VBISX - news), Vanguard Bond Index Fund Intermediate Term Bond (Nasdaq:VBIIX - news), Vanguard Bond Index Fund Long Term Bond, Vanguard Short Term Corporate Bond Fund (Nasdaq:VFSTX - news), Vanguard Intermediate Term Corporate Bond Fund (Nasdaq:VFICX - news), Vanguard Variable Insurance Short Term Corporate Bond Fund and an unspecified California municipal fund. Citigroup's (NYSE:C - news) asset management operation, home to Salomon Brothers and Smith Barney funds, said just under 2 percent of its California tax-exempt money market fund holds short-term debt from the two utilities. Citigroup spokesman Ed Giltenan noted that the two issues held are backed by bank letters of credit, making it highly unlikely any default would affect the fund. Giltenan also said several of the firms' long-term funds have exposure, but he called it ``minimal.'' Nuveen Investments, a unit of John Nuveen Co. (NYSE:JNC - news), said last week it had $27.8 million of bonds from Southern California Edison and Pacific Gas & Electric debt in three separate tax-exempt bond funds. Chicago-based Nuveen's exposed closed-end, exchange-traded funds are Nuveen California Quality Income Fund (NYSE:NUC - news); the $862 million Nuveen Insured Quality Municipal Fund (NYSE:NQI - news), with 0.61 percent exposure to Edison; and the $529 million Nuveen California Select Quality Fund (NYSE:NVC - news) holding 1.65 percent of its assets in Edison securities. Meanwhile, American Century Investments, a mutual fund company based in Mountain View, Calif., said that several months ago it had liquidated the small amount of utility debt held in its three California funds holding $1.3 billion in assets. ``It was something we saw coming down the road,'' said spokeswoman Deborah Larson, pointing out that the firm's base in California gave the portfolio managers an early lead on the situation. Spokespersons for Putnam Investments, a unit of Marsh & McLennan Cos. Inc. (NYSE:MMC - news), and Fidelity Investments said they could not comment on their companies' individual holdings. The Dreyfus Corp., Wells Fargo Bank (NYSE:WFC - news) unit Wells Fargo Funds, and Franklin Resources Inc. (NYSE:BEN - news) did not return calls for comment. Putnam, Fidelity, Dreyfus and Franklin manage the largest tax-exempt bond funds that own California debt. biz.yahoo.com