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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2552)	10/26/2001 2:04:17 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 2850

John: Check out this one though from the 23rd. schaeffersresearch.com From the monthly I'd say its not going back over $20 any time soon. You know taking down the credit line before the banks could change the terms or pull it in is a good move but paying off commercial paper (at todays low rates) is not a good sign. Besides indicating liquidity issues it shows the line is less expensive than what the cp would be reissued @ when rolled over. Tim

To: John Pitera who wrote (2552)	10/26/2001 3:14:29 PM
From: John Pitera	Read Replies (2) \| Respond to of 2850

ENE--DJ Enron's Debt Falls As Company Draws Down On Bank Loans Dow Jones News Service ~ October 26, 2001 ~ 12:27 pm EST NEW YORK (Dow Jones)--Enron Corp.'s (ENE) bond and bank debt was quoted lower early Friday following the Houston energy giant's decision Thursday to draw down about $3 billion on its bank loan facilities. Late Thursday, Enron said it had taken action to dispel uncertainty in the financial community. Specifically, the company said it drew on its committed lines of credit to provide cash liquidity in excess of $1 billion. Enron's 6.4% bonds which come due in July 2006 were hovering just below 80 cents on the dollar, down from around 82 cents on Thursday. Trading activity in investment-grade bank debt like that of Enron's isn't as active as the market for leveraged loans made to companies with less than investment-grade ratings. But fixed-income sources noted some offers Friday for Enron's bank debt at around 94 cents on the dollar, still well-above distressed levels. They add that banks may want to try to sell Enron's bank debt, which is now funded following the drawdown, but at a coupon that was negotiated several months ago. That was well before Enron ran into its current market turmoil. Last week, the company reported a $618 million third quarter loss and $1.2 billion reduction in shareholder equity. The company has said that the Securities and Exchange Commission is conducting an inquiry into transactions it did with Andrew S. Fastow, its former chief financial officer who was replaced on Wednesday. Moody's Investors Service rates Enron's senior unsecured debt at Baa1, though it's on review for a possible downgrade. Fitch Inc. and Standard & Poor's both rate the debt triple-B-plus. Fitch also has Enron's debt on review for a possible downgrade, while S&P changed Enron's credit outlook to negative from stable. Enron's stock was trading at around $15.87, down 48 cents at around 12.20 p.m. EDT. Among the Enron bank debt that comes due in May 2002 is a $1.75 billion 364- day commercial paper backstop facility. The company also has a $1.25 billion revolving facility that's due in April 2005, according to Loan Pricing Corp. in New York. One distressed debt investor said some of the bank debt comes with a low coupon of around 55 basis points over the London Interbank Offered Rate. Banks, the investor said, "are funding it and not getting paid for the risk at Libor plus 55, even though it comes due in May '02," the investor said. Another fixed-income official said that trading desks may start to kick the tires on Enron's bank debt, given the run of fallen angels, or investment-grade companies that have been downgraded to below investment-grade status, within the last year. Among such companies are Lucent Technologies Inc. (LU) and Xerox Corp. (XRX) "As soon as banks have a piece of paper they never expected to be funded, it really changes their perception and some just want to get this stuff off their books," this person said. Some banks, though, may not be active seller of Enron's debt given that banks' business with big investment-grade companies is relationship-driven. "Banks are not very quick to pull out of a relationship like that," the fixed income official said.