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Power News
01 December 2001
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Enron: what's your exposure?
Enron's move to file for Chapter 11 bankruptcy raises the prospect
of a series of acquisitions of power and gas assets at rock-bottom
prices. This, however, looks like being the only real piece of good
news to come out of Enron's collapse for the energy business. And
the filing means that portfolio managers will again have to comb
their books in an attempt to estimate their exposure.
Enron presents a series of challenges potentially far greater than
PG&E's bankruptcy. The latter was as much a product of
non-commercial factors, and its structured finance activities
largely confined to stranded cost bonds and NEG leases. In Enron's
case the vast majority of its assets have been taken off-balance
sheet ? the root cause of the collapse in confidence of the
self-proclaimed ?asset-light? energy trader.
Unravelling these vehicles will take a very long time, and
raises a number of structural...
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