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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: pls418 who wrote (12739)	3/6/2002 3:16:14 PM
From: stockman_scott	Read Replies (1) \| Respond to of 23153

Calpine shares skyrocket on optimistic outlook Wednesday March 6, 2:49 pm Eastern Time By Carolyn Koo NEW YORK, March 6 (Reuters) - Shares of Calpine Corp. (NYSE:CPN - news) soared more than 22 percent on Wednesday as investors turned positive on prospects for the independent power producer's liquidity and a recovery for the struggling U.S. economy. Calpine's stock was up $1.72, or 18.8 percent, to $10.87 in Wednesday afternoon trade on the New York Stock Exchange. The stock had been up as much as 23 percent earlier in the day and had jumped 16.4 percent on Tuesday. Power companies, already struggling with low commodity prices, have been punished by the fallout from Enron Corp.'s collapse late last year, as investors worry over weak balance sheets and opaque accounting. Calpine, one of the largest U.S. ``junk'' bond issuers, has been trying to obtain a $1 billion unsecured working capital credit facility in a bid to improve its liquidity, and there is a sense that the deal could finally be imminent. ``I think there's optimism that the company is moving very close to closing this credit facility, which in my opinion is the biggest near-term hurdle for these guys to overcome,'' said Chris Budzynski, an analyst at Legg Mason. ``In general, investors are becoming much more comfortable with the liquidity situation, not just of Calpine but of all the (independent power producer) companies at this point,'' he added. The company released a statement last week that it was actively exploring new ways to build a strong cash position, including the option of a new, expanded, and secured credit facility. Also boosting Calpine's stock price are growing hopes of a cyclical rise in electricity demand, on signals that a U.S. economic recovery could be sooner and stronger than originally thought. ``Some of the fundamentals are beginning to turn around on us,'' said Michael Worms, an analyst at Gerard Klauer Mattison. There are also indications that natural gas prices may begin to rise in the second half of the year, which means that power prices are likely to rise too. Natural gas prices dropped more than 60 percent in the fourth quarter of 2001 from the year-earlier quarter. ``A lot of people are starting to see a glimmer of hope and are really approaching this more with a sense of cautious optimism rather than a sense of outright pessimism,'' Budzynski said. In the wake of Enron's bankruptcy, many energy companies have been forced to announce plans to shore up their balance sheets. Those plans have included selling assets, lowering capital spending, and canceling plans for power plants. Concerns about Calpine's liquidity prompted the company to slash up to $2 billion from capital spending plans and postpone plans to build 34 new power plants, leaving 26 new plants currently under construction.