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Resurrection?
01 October 2001
California's power crisis is still not over, but deal flow continues and rescue plans are underway. By Jim Smith.
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Uncertainty over how the Californian power fiasco eventually will
play out is causing spreads to widen on those deals that are going
to the project market for financing. Lenders are now looking with
concern at some companies, such as Edison Mission and Pacific Gas
& Electric, which were perceived as blue chip. Credit analysts
at some banks are getting rattled at the energy sector in general
while deal-makers are being forced to sweeten the take to lure in
recalcitrant lenders.
?There is no doubt that the California energy crisis has had a
chilling effect on the perception of how robust the US energy
market is, but activity is not grinding to a halt,? says Ken
Malloy, chief executive of the Centre for the Advancement of Energy
Markets and a former Federal Energy Regulatory Commission official.
?California is unique from a number of perspectives. While every
state has at least one stupid energy policy, California has a
combination...
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