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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 (2593)	11/13/2001 3:36:30 PM
From: John Pitera	Read Replies (1) \| Respond to of 2850

ENE--- LOL S&P still trying to understand ENE's Partnerships -g- S&P Says Doesn't Fully Understand All Enron Partnerships Dow Jones Newswires November 12, 2001 By Christine Richard and Michael Barr Of DOW JONES NEWSWIRES NEW YORK -- Enron Corp. (ENE) has retained its investment grade rating because Dynegy Inc.'s (DYN) bid to take over the beleaguered company has restored some much needed investor confidence, Standard & Poor's analysts said Monday during a conference call. In fact, in the absence of any deal, such as that put forward last week by Dynegy, Enron would be rated low double-B or high single-B, S&P analysts said. S&P recently lowered Enron's rating to triple-B minus from triple-B, leaving it one notch above speculative grade status. That's important because Enron's substantial trading operations are heavily reliant on a strong credit rating to alleviate counterparty credit concerns. S&P also said Monday that it was placing Dynegy's rating on review for possible downgrade following the news that Dynegy was making a stock-for-stock bid for Enron. S&P has assigned Dynegy a senior unsecured debt rating of triple-B. S&P officials stressed that what has weighed most heavily on Enron's rating in the last few weeks has been declining investor confidence. "The company is not in danger of imminent bankruptcy, or default," said Ron Barone, an S&P analyst. However, the S&P read on investor confidence is that "Enron is not all that viable right now," said one analyst. S&P analysts stated that they might not fully understand all the Enron partnerships. "There is a little uncertainty about all the partnerships that Enron has," said Barone. But, S&P analysts added, they did understand the financial impact of the partnerships that have been disclosed. Enron stock and bonds have been battered since the company revealed the extent of its dealings with partnerships set up and run by its former chief financial officer, Andrew Fastow. While S&P is assuming Enron has disclosed all the relevant information about those partnerships, there may be more details forthcoming as a special committee established by Enron goes about its work, they added. S&P's downgrade to of Enron to triple-B-minus was due to an erosion of investor confidence, analysts stressed. And, the Enron Negative CreditWatch "was a heads-up to Enron counterparties," said an analyst. S&P analysts said that despite the decision to place Dynegy on Negative CreditWatch, the ratings could remain at the same level, at triple-B. For that to happen, it will be necessary for Dynegy to dispose of non-core assets that "could impair the new Dynegy balance sheet," said an S&P analyst. It will also be necessary for the company to successfully integrate Enron's trading business into its own, retaining key employees.