USA: S&P may still cut Enron, expects Dynegy merger.
Reuters English News Service, 11/20/01

IN THE MONEY: Enron Melts As Many See Merger In Jeopardy
Dow Jones News Service, 11/20/01
Dynegy Won't Comment On Merger Partner Enron's 10-Q
Dow Jones News Service, 11/20/01

Enron's Credit Rating Remains on Negative Watch, S&P Says
Bloomberg, 11/20/01

Accounting Watchdogs to Examine Auditors' Peer Review Process
Bloomberg, 11/20/01

NewPower Plugs Cash Drain by Revamping Power Pact With Enron
Bloomberg, 11/20/01

Enron Falls After Company Cuts Earnings, Says $690 Mln Note Due
Bloomberg, 11/20/01

Options Report: Traders Wary As Mkt Shows 'Lack Of Fear'
Dow Jones Capital Markets Report, 11/20/01

USA: Reliant surprised by latest Enron disclosure.
Reuters English News Service, 11/20/01

STOCKWATCH Enron slides after warning on debt, cut in Q3 EPS
AFX News, 11/20/01

Andersen-Enron Audit Prompts Look at Peer Reviews (Update1)
Bloomberg, 11/20/01

Energy Cos Limit Business With Enron After 10Q -Traders
Dow Jones Energy Service, 11/20/01

US FERC Denies Regulatory Waiver For Dynegy LNG Terminal
Dow Jones Energy Service, 11/20/01

USA: UPDATE 2-Enron stock hits decade low after debt warning.
Reuters English News Service, 11/20/01

USA: Enron shares slide after debt warning.
Reuters English News Service, 11/20/01

Stock Market Analysis: Looking Out To Next Year
CNNfn: Market Coverage - Morning, 11/20/01

Deregulation Not Seen Leaderless After Enron's Collapse
Dow Jones Energy Service, 11/20/01

Enron Falls Amid Concern Debt Threatens Dynegy Bid (Update6)
Bloomberg, 11/20/01

Enron BBB- rating on CreditWatch negative - S&P
AFX News, 11/20/01








USA: S&P may still cut Enron, expects Dynegy merger.

11/20/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Nov 20 (Reuters) - Enron Corp.'s debt ratings may still fall to junk status, Standard & Poor's said on Tuesday, a day after the energy trading giant said it may have to pay off a $690 million note next week, and owes $9.15 billion in debt and other obligations by the end of 2002. 
S&P also said Enron's near-term liquidity position is "expected to be sufficient" to allow it to merge with smaller Houston-based rival Dynegy Inc. . The merger, announced this month, is expected to close in the third quarter of 2002.
S&P, which said it may cut Houston-based Enron's "BBB-minus" and "A-3" long-and short-term unsecured debt ratings, each one notch above junk, said the chance Enron will have to pay off the note raises "liquidity issues," but that "given the alignment of interests between Enron and the banks," Enron's ability to renegotiate the note "will be successful." 
Enron said in its quarterly report, filed Monday with the Securities and Exchange Commission, that it has less than $2 billion of available cash and credit lines. It said in the filing the recent S&P downgrade to "BBB-minus" may force it to pay off the $690 million note by Tuesday if it doesn't find collateral to guarantee the debt of an affiliated partnership. 
Enron shares traded Tuesday afternoon on the New York Stock Exchange at $6.99, down $2.07, or 22.9 percent, on volume topping 53 million shares. They have fallen more than 91 percent in 2001 amid accounting problems, earnings restatements, a federal investigation and management changes.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

IN THE MONEY: Enron Melts As Many See Merger In Jeopardy
By Carol S. Remond

11/20/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
A Dow Jones Newswires Column 

NEW YORK -(Dow Jones)- Investors are running for the exits as doubts about Enron Corp.'s (ENE) planned merger with Dynegy Inc. (DYN) mount.
Debt and equity markets are taking news of Enron's never ending credit woes with renewed pessimism Tuesday, sending the company's stock down almost 24% and its bonds sharply lower. 
And with so much riding on Dynegy's financial support, risk arbitrageurs, those investors who bet on the stock price of companies involved in merger, aren't willing to play. "There is just too much risk," said a trader at a New York risk arbitrage firm. "Nobody wants to even get close to the deal." 
Perhaps most telling about the uncertainty surrounding Enron and the merger with Dynegy is the fact that even a 68% risk premium over the value of the Dynegy deal has so far failed to attract investors. "The deal appears in real jeopardy here," a bond trader said. 
Under the merger plan, Enron holders would receive 0.2685 Dynegy share for each Enron share. At Dynegy's current share price of $41.77, that means the value of the deal is about $11.20 a share for Enron holders. But Enron stock recently traded as low as $6.68 a share, almost 68% below the value of the merger. 
Adding to doubts about Enron's long-term viability, the company said in a delayed quarterly filing late Monday that its ability to continue as a going concern depends on a number of factors, including being able to retain an investment grade credit rating. 
Dynegy declined to comment on whether its decision to merge with Enron would be affected by the company's latest Securities and Exchange Commission filing, including the disclosure that Enron will have to repay $690 million in debt by next Tuesday if it doesn't come up with collateral for a loan. 
An Enron spokeswoman wasn't available to comment on the merger plan. 
Among other bad news, Enron's latest report warned investors that the company faces immediate demand for $3.9 billion in debt if its credit rating is downgraded any further. 
Earlier this month, Standard & Poor's Corp. and Moody's Investors Service cut Enron's credit ratings to "BBB-" and "Baa3", just one notch higher than below-investment grade, or "junk" status. The rating agencies warned that they may cut their respective ratings again. Neither S&P nor Moody's were available for comment Tuesday. 
Meanwhile, as investors look at the Dynegy deal as Enron's one and only hope to avoid bankruptcy, bondholders are also showing renewed worries. 
Enron's 7 7/8% bonds due in 2003 are down about 10 cents on the day, now trading at about 70 cents on the dollar. Subordinated bonds due in 2005 are also sharply lower, changing hands at about 62 cents on the dollar. 
Enron has set a number of partnerships over the years to hedge investment risks, and in some cases keep debt off its balance sheet. In the wake of a SEC probe into its accounting and disclosure practice, the company recently restated its earnings, reducing profits taken over previous years by more than $500 million. Enron also took steps to consolidate some debt back on its books. 
Carol S. Remond; 201-938-2074; Dow Jones Newswires 
carol.remond@dowjones.com



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Dynegy Won't Comment On Merger Partner Enron's 10-Q
By Christina Cheddar
Of DOW JONES NEWSWIRES

11/20/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Dynegy Inc. (DYN) declined Tuesday to comment on whether its merger with Enron Corp. (ENE) would be affected by the contents of Enron's quarterly filing with the Securities and Exchange Commission late Monday. 
In the 10-Q, which was filed five days past the SEC deadline, Enron revised its third-quarter earnings downward by 3 cents a share, and disclosed it may have to pay off a $690 million note owed to an affiliated partnership because a clause in a financial agreement was triggered by the reduction in Enron's senior unsecured debt rating to triple-B-minus by Standard & Poor's a week ago.
The amount will have to be paid by Nov. 27 if Enron doesn't find collateral to guarantee the debt, the company said in the filing. Enron is working to come up with an acceptable agreement on the debt, but didn't disclose who holds the note. 
Enron used partnerships in order to hedge its investment risk, and in some cases to keep the debt off its balance sheet. The practice is being investigated by the SEC and by an internal committee Enron has named. 
In the filing, Enron also said it may have to take a $700 million pretax charge to earnings for the declining value of assets held by another partnership, Whitewing LLP. 
When asked if Dynegy had known about the collateral call on the debt or about the decline in Whitewing's value, a Dynegy spokeswoman declined to comment. 
"We are referring all questions about the Enron 10-Q to Enron," said the spokeswoman. Representatives of Enron weren't immediately available for comment. 
Dynegy agreed to buy Enron earlier this month. Earlier Tuesday, the deal was worth about $11.97 billion in stock, but Enron shares were trading at a 32.5% discount to the offer price earlier Tuesday morning, which is a sign of the uncertainty surrounding the transaction. 
Enron shares were recently trading at $7.86, down $1.20, or 13.2%, while Dynegy shares changed hands at $43.29, down 31 cents, or 0.8%. 
A ChevronTexaco Corp. (CVX) official wasn't immediately available to comment on the matter. 
ChevronTexaco, San Francisco, owns 26% of Dynegy and is providing $2.5 billion in cash to Dynegy as part of the buyout. Last week, an inital payment of $1.5 billion was transferred to Dynegy and then to Enron to help meet Enron's immediate cash needs. 
Dynegy's merger agreement with Enron contains several provisions beyond the standard "material adverse change" provision that would allow the deal to be terminated. Still, some question whether Dynegy was able to fully assess Enron's liabilities prior to striking the deal. 
Investors have expressed frustration with Enron's lack of disclosure, and even marvelled at the fact that the 10-Q included material that could have been mentioned in previous filings or company conference calls. 
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166
christina.cheddar@dowjones.com

(Corrected 1:50 PM) 
Enron Corp. (ENE) must make arrangements to pay off a note owed to an affiliated partnership by Nov. 27, unless it finds collateral to guarantee the debt. 
(An item published at 12:40 p.m. EST misstated the date.)



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Enron's Credit Rating Remains on Negative Watch, S&P Says
2001-11-20 15:05 (New York)

Enron's Credit Rating Remains on Negative Watch, S&P Says

     New York, Nov. 20 (Bloomberg) -- Enron Corp.'s credit rating
remained on negative watch by Standard & Poor's, a day after the
largest energy trader released its delayed third-quarter
regulatory filing.

     Shares of Enron fell as much as 28 percent today, and its
bonds have also tumbled amid concern the company might run out of
cash before its takeover by Dynegy Inc.




Accounting Watchdogs to Examine Auditors' Peer Review Process
2001-11-20 13:32 (New York)

Accounting Watchdogs to Examine Auditors' Peer Review Process


     Washington, Nov. 20 (Bloomberg) -- The accounting industry's
watchdog group plans to examine whether audit firms are conducting
adequate ``peer reviews'' of one another in light of Arthur
Andersen LLP's failed audits of Enron Corp., according to the
group's chairman, Charles Bowsher.

     A detailed review of the Enron case rests with the Securities
and Exchange Commission, the Public Oversight Board chairman said.
The board will look at the bigger issue, ``which is how can you
have peer reviews and still have these kinds of failures?''
Bowsher said.

     The POB, a private group created to oversee the accounting
industry's self-governance as an advocate for the public, will
take the matter up at a closed meeting in Washington on Dec. 4, he
said.

     Houston-based Enron, the largest energy trader, earlier this
month reported that it overstated earnings by $586 million over
four-and-a-half years, inflated shareholder equity by $1.2 billion
because of an ``accounting error,'' and failed to consolidate
results of three affiliated partnerships into its balance sheet.

      Andersen, the world's fifth-largest accounting firm, served
as Enron's outside auditor for more than a decade, assuring
investors that the company's financial statements conformed with
generally accepted accounting principles. The SEC is investigating
some of Enron's partnerships.

     Firms that audit public companies submit to ``peer reviews''
of their accounting practices by other accounting firms, a
practice aimed at assuring the investing public that the firm
complies with professional standards.

     U.S. Representative John Dingell, a Michigan Democrat, said
yesterday in a letter to Bowsher that none of the Big Five
accounting firms has ever issued a negative report against another
at the end of any peer review.

                      Dingell Skeptical

     ``There appears to be little reason for the public to have
faith in Andersen or the peer review process,'' Dingell wrote.

     Andersen responded saying it had faith in the accounting
profession's self-regulatory process, which the POB oversees.

     A spokeswoman at Deloitte & Touche LLP, Andersen's peer-
reviewer, didn't return a telephone call seeking comment.
Deloitte, the third-largest reviewer, is conducting a peer review
of Andersen now.

     Bowsher, a former U.S. Comptroller General, said the POB was
thinking of looking into peer review issues before receiving
Dingell's letter.

     ``But this letter certainly focuses the issue,'' he said.
     Dingell's letter said the outside counsel to a special
committee of Enron's board has retained Deloitte & Touche to help
it review the company's accounting problems.

                      Conflict of Interest?

     ``Do DT's dual roles create a conflict of interest?''
Dingell's letter asked. ``If DT finds numerous problems on Enron,
will DT try to `whitewash' or reconcile them in order to be able
to issue a clean peer review report?''

     Dingell also questioned whether the money Andersen pays
Deloitte & Touche for its current peer review will sway the
outcome.

     ``How will this influence, if at all, DT's `independent'
judgment of Andersen's work on Enron?'' the letter said.

     Bowsher responded: `There's nothing we can do to change the
fact that Deloitte & Touche has done the previous reviews of
Andersen. Now, the question is should they (the outside counsel)
use the same firm, or would it be better for them to use another
firm? And that's pretty much their decision.''

     Bowsher said he has no knowledge of the accounting problems
at Enron beyond what he's read in newspapers.
     ``It looks pretty bad, doesn't it?,'' he said.

                         Expanded Power

     Dingell's request could prove a test of the POB's recently
expanded power and oversight. The group's charter was revised
earlier this year to make the POB the accounting industry's
premier watchdog group following criticisms by former SEC Chairman
Arthur Levitt and former SEC chief accountant Lynn Turner. They
criticized the ``alphabet soup'' of accounting self-regulators and
voiced frustration with the industry's oversight of itself.

     The new charter put the POB in charge of supervising the
setting of auditing and audit-independence standards and
monitoring how firms audit public companies. It also gave the
board, which is funded by the industry, the power to set its own
budget with no strings attached.

     ``Now, for the first time, we will see if the POB is able to
act in the public interest and undertake the mandate presented to
it by Congressman Dingell and by its new charter,'' Turner said.
``They didn't have the power in the past.''

      The POB was set up in 1977 to represent the public interest
in overseeing the accounting industry's self-governance structure.
Before its charter was revised, the POB was just one facet of the
enforcement of auditing industry standards regarding publicly
traded companies. Now, it oversees the activities of these other
groups as well.




NewPower Plugs Cash Drain by Revamping Power Pact With Enron
2001-11-20 11:05 (New York)

NewPower Plugs Cash Drain by Revamping Power Pact With Enron

     Washington, Nov. 20 (Bloomberg) -- NewPower Holdings Inc.,
one of the first companies to market power to homeowners
nationwide, recently plugged a cash drain brought on by plunging
energy prices.

     The Purchase, New York, company buys gas and electricity from
suppliers such as Enron Corp. and resells the energy to
residential and small business customers in states such as
Pennsylvania, Ohio, Georgia and Texas. NewPower markets its
service as an alternative to local utilities in restructured
retail energy markets.

     Recent declines in energy prices have required NewPower to
deposit $110 million in cash with Enron, its largest shareholder
as well as a major creditor, leaving the company with about $33
million. According to a regulatory filing, Enron recently agreed
to allow NewPower to replace some of the cash collateral with
assets such as inventory and customer IOUs.

     ``We had a certain amount of cash tied up in those collateral
positions,'' said William Jacobs, chief financial officer at
NewPower. ``Obviously, every dollar you put up there reduces the
amount of money you can spend other places.''

     NewPower represents a new breed of energy middleman that
contracts to provide power to retail customers at certain prices.
Rather than owning power plants and gas pipelines, though, the
company simply purchases energy -- at slightly lower prices --from
suppliers such as Enron.

     The contracts with Enron require NewPower to post collateral
with the supplier if the market price of natural gas or
electricity falls below the price set in the contract. And prices
for natural gas, used to fuel most electricity plants, have
plunged.

                       Offsetting Contracts

     Natural gas for December delivery fell 4.6 cents to $2.740
per million British thermal units on the New York Mercantile
Exchange. That is down from a record $10.10 per million British
thermal units last December.

     NewPower isn't at risk of losing money because the company
has offsetting contracts to sell the electricity and natural gas
at even higher prices to retail customers. It's more of a timing
issue: the company has had to post the collateral before the sales
under these retail contracts take place.

     Nevertheless, the need to provide collateral has weighed
heavily on NewPower's balance sheet. Cash and cash equivalents
have declined to $33.4 million on Sept. 30 from $179.9 million on
Dec. 31, 2000. Meanwhile, restricted cash, such as the collateral
provided to Enron and others, has ballooned to $180.2 million from
$16.2 million during the same period.

                        Other Transactions

     On Oct. 18, according to a quarterly report filed with the
Securities and Exchange Commission, Enron agreed to permit
NewPower to substitute inventory and customer receivables for as
much as $40 million of the cash collateral. This agreement will
expire Jan. 4, 2002.

     ``Assuming broadly stable forward energy prices,'' the filing
said, NewPower ``has sufficient financial resources to conduct its
business until it secures permanent asset-backed or similar
financing.''

     The company also said in the SEC filing that it has recently
entered into a series of transactions ``to reduce the risk of
posting additional cash as collateral'' if energy prices fall
further. These transactions, which the company says are an
exception to its usual hedging strategy, ``increase the company's
exposure to commodity price fluctuations.''

                           Joint Venture

     NewPower was formed as a joint venture between Enron, General
Electric Capital Corp., the California Public Employee's
Retirement System, the Ontario Teachers' Pension Plan Board, and
the merchant banking arm of Donaldson, Lufkin & Jenrette Inc., now
owned by Credit Suisse Group.

     In October 2000, the company held an initial public offering
of 24 million common shares at $21 each. NewPower shares have
fallen more than 83 percent so far this year and now trade at
$1.60 each.



Enron Falls After Company Cuts Earnings, Says $690 Mln Note Due
2001-11-20 09:39 (New York)

Enron Falls After Company Cuts Earnings, Says $690 Mln Note Due

     Houston, Nov. 20 (Bloomberg) -- Enron Corp. shares fell as
much as 10 percent after the biggest energy trader restated third-
quarter earnings for a second time this month and said it may have
to make early payment of a $690 million note next week.

     Shares of Enron, which agreed to a takeover by rival Dynegy
Inc. this month after a financial crisis threatened it with
bankruptcy, fell 86 cents to $8.20. Dynegy fell $1.30 to $42.30.

     Enron reduced third-quarter results by 3 cents a share,
bringing the period's loss to 87 cents, or $664 million, according
to a U.S. Securities & Exchange Commission filing. On Nov. 8,
Enron lowered earnings back to 1997 by $586 million to reflect
losses by affiliated partnerships that were wrongly kept off the
books. That included a third-quarter reduction of $17 million.

     A drop in Enron's senior unsecured debt rating to ``BBB-'' by
Standard & Poor's on Nov. 12 may force Enron to pay off the
$690 million note by Nov. 27 if it doesn't find collateral to
guarantee the debt taken on by another affiliated partnership, the
company said in the filing released yesterday after the U.S. stock
market closed.

     Without repayment or collateral, investors in a partnership
that owns Brazilian natural-gas assets can begin to liquidate the
partnership's assets, Enron said. The company said it's working
with lenders to come up with an acceptable agreement on the debt.

     Enron used affiliated partnerships to raise money quickly and
take debt off its books. Its shares plunged this year as investors
questioned whether the partnerships also were being used to hide
losses from failed investments.

     Chief Executive Officer Kenneth Lay said earlier this month
that buying back 62 million shares from two such partnerships cost
Enron shareholders $1.2 billion in lost equity.

     Making good on debt owed by its Whitewing affiliated
partnership may cut Enron's fourth-quarter earnings, Enron said.
Enron is obligated to back Whitewing by issuing junior convertible
preferred stock. Because Enron's stock has plunged, it may have to
write down its assets by $700 million, the filing said.

     Dynegy agreed Nov. 9 to buy Enron in a transaction now valued
at $25 billion in stock and assumed debt. Both companies are based
in Houston.

     ChevronTexaco Corp., the second-largest U.S. oil company,
owns 26 percent of Dynegy and is providing $2.5 billion in cash as
part of the Enron buyout.

     Shares of ChevronTexaco, based in San Francisco, rose $1.63
to $84.54.



Options Report: Traders Wary As Mkt Shows 'Lack Of Fear'
By Kopin Tan and Marcelo Prince
Of DOW JONES NEWSWIRES

11/20/2001
Dow Jones Capital Markets Report
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Stock market investors may give thanks for stocks' surge this fall. But in the options market, all that feel-good bullishness has only given investors pause. 
With options sentiment indicators all showing what traders say is "a lack of fear," option investors - many of them famously contrarian - are beginning to become more fearful. A number are hedging their long stock positions with options or becoming more bearish in their short-term outlooks, even with the Dow Jones Industrial Average moving technically into bull-market territory this week, and the Nasdaq Composite Index up more than 37% from its late-September low.
"Is it possible the market could embark on a new sustained bull market? I don't think so," said Jay Shartsis, director of option trading at R.F. Lafferty & Co. It will take more than 18 months to work out the excesses of the last bull market, he added, arguing the fall rally has a "limited shelf life." 
Meanwhile, the 20-day moving average of the ratio of puts traded to calls has continued to ease. The various volatility indexes have fallen to their lowest levels since late-August, despite the greater uncertainty facing the financial market since September. To many options market watchers, these signs of mounting investor confidence do not auger well for this bull run's longevity, since rallies often run out of steam when bullishness reaches a peak. So many investors continue taking profits or moving to lock in profits with defensive puts. 
In the technology sector, for instance, the American Stock Exchange's Nasdaq Volatility index, or QQV, continued slipping down to the low-40 mark when it fell 0.67 to 42.04. This tech-sector fear gauge has fallen 23% so far in November and is off 50.7% from its late-September peak, a decline inversely proportional to the roughly 50% gain posted by the Nasdaq 100 Tracking stock, or QQQ. 
Just how low is the current QQV level? So far this year, QQV has closed below 40 just five times, all during the traditionally slower summer months. In contrast, the QQV has closed above 50 for 132 sessions this year, and above 60 at least 52 times. With the QQV near its year low, many traders are bracing for it to rise again, and it rises when investors bid up protective put prices in the options of Nasdaq 100 Tracking Stock, or QQQ. This in turn happens when the Nasdaq 100 index tumbles. 
Enron Corp., whose stock has been extremely volatile of late, saw implied volatility of its options spike even higher after it warned that continuing credit worries and a decline in asset value could hurt its fourth-quarter earnings. 
Enron stock fell $2.15 or 24% to $6.85. The implied volatility of its December 5 calls reached as high as about 158%, compared with historical level of about 94%. The volatility of its defensive puts were even higher at about 175% as investors traded those aggressively, noted Paul Foster, options strategist at Beyondthebull.com. The near-month options were trading fast and furious. 
Meanwhile, investors also found places to make bullish bets despite their cautious stance. 
Conoco Inc.'s calls traded actively as its stock continued to rise amid speculation that another suitor might make a bid for the oil company. Conoco had agreed to merge with Phillips Petroleum Co. in a stock swap that offered its shareholders hardly any premium, yet its stock has risen instead of fallen, driven by rumors that a "white knight" bid might materialize. 
Implied volatility has been steady in Conoco's January calls, but it seems the possibility of another offer has made some investors more interested, said a trader at Botta Capital, the CBOE specialist for these options. 
Conoco stock was up 98 cents or 3.8% to $26.96, following a 6.9% rise Monday. The in-the-money January 25 calls were active as "retail" or individual investors bought these calls, each of which allow the holder to buy 100 Conoco shares for $25 apiece. These calls rose 65 cents to $2.80 on CBOE volume of 510 contracts, compared with open interest of 2,596. 
Conoco's January 27.50 calls also were active as some investors bought stock and sold these calls to offset the cost of the buying the stock. These calls rose $1.10 to $1.55 on CBOE volume of 872 contracts, while 786 contracts traded at other exchanges. Open interest was 807. 
Oracle Corp.'s near-term calls also traded briskly as an institutional investor bought these. It isn't clear what prompted the call buying. The investor might be making a bullish bet on the database software maker in the final days of its fiscal second quarter. In addition, an influential analyst at Morgan Stanley also had made positive comments in a recent note. 
Volatility of Oracle's near-term options remains little changed, said a trader at Letco, the CBOE specialist for these options. Oracle executives had warned last week it would miss second-quarter earnings goals, but the volatility did not ease much, indicating that investors expect the stock to be volatile at least until its earnings report in December. 
Oracle's December 15 calls fell 15 cents to 85 cents on CBOE volume of 12,713 contracts, compared with open interest of 62,103 contracts. Oracle shares slipped 19 cents to $14.68. 
-By Kopin Tan, Dow Jones Newswires; 201-938-2202 
kopin.tan@dowjones.com 

(Marcelo Prince of Dow Jones Newswires contributed to this report.)



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
USA: Reliant surprised by latest Enron disclosure.

11/20/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Nov 20 (Reuters) - Reliant Resources Inc. , a trading partner of beleaguered energy trading giant Enron Corp., said on Tuesday it was surprised by news that Enron could be forced to pay $690 million in debt next week because of a credit rating downgrade. 
Shahid Malik, Reliant's president of energy trading and marketing, said his company was still evaluating the implications of the disclosure, which Enron made in a filing with the Securities and Exchange Commission (SEC) on Monday.
"It's another surprise to the industry. We don't need any more surprises," Malik told reporters at a press presentation of a new index devised by Houston-based Reliant to track natural gas consumption. 
Reliant is a big wholesale electricity and natural gas trader and as such both a competitor and trading counterparty of Enron. 
Malik said Enron executives had not mentioned the potential payment of $690 million during a conference call with analysts on Nov. 14, two days before the credit rating downgrade that triggered it on Nov. 12. 
Enron agreed to be acquired by smaller rival Dynegy Inc. for some $9 billion in stock on Nov. 9 after a collapse in investor confidence and snowballing financial problems brought Enron to the brink of collapse. 
Dynegy wrote clauses into its agreement with Enron that allow it to walk away from the deal if the problems at Enron turn out to be far worse than previously disclosed, but Dynegy executives have said it is unlikely those clauses will be invoked. 
Malik said that as a trading partner in wholesale energy markets, Reliant will seek further clarification from Enron about its financial position. 
"My guess is that they are going to have a hard time coming up with the money," he said. 
Malik said Enron's bids and offers in the wholesale electricity and natural gas markets had become less competitive in recent weeks and that this had allowed Reliant and other companies to capture some market share from Enron. 
Reliant continued to do business with Enron, he said, but was exercising "heightened caution". 
Malik said Reliant had not hired any traders away from Enron recently and was currently well staffed. "But you always look for good people, you always look for talent," he added.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
STOCKWATCH Enron slides after warning on debt, cut in Q3 EPS

11/20/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
NEW YORK (AFX) - Shares of Enron Corp were sharply lower in midsession trade after the company warned yesterday that it faces heavy debt repayment obligations in less than 10 days, and has reduced its already-reported third-quarter earnings, dealers said. 
At 12.10 pm, Enron was down 1.16 usd, or 12.80 pct, at 7.90. ChevronTexaco Inc affiliate Dynegy Inc, which agreed to acquire Enron for 8.5 bln usd in cash and paper, was down 20 cents, or 0.46 pct, at 43.40. ChevronTexaco was up 3.15 usd at 86.06.
The DJIA was down 71.69 points at 9,904.77 and the S&P 500 was down 5.42 points at 1145.24. 
In a 10Q filing with the Securities and Exchange Commission, Enron said that because of a credit rating downgrade last week, it now faces a debt payment of 690 mln usd by Nov 27. 
It also restated its third-quarter earnings, lowering them by 3 cents per share. 
Wall Street analysts, however, said the announcement was not surprising following the company's recent credit downgrades and Enron's board investigation into the company's balance sheet. 
They also said the news should not endanger Enron's purchase by ChevronTexaco affiliate Dynegy. 
Credit Suisse First Boston analyst Curt Launer, who maintained his strong buy rating on Enron, said he expects the company's 690 mln usd obligation will be renegotiated, and "satisfied out of (Enron's) current cash position of 1.5 bln usd or collateralized." 
The analyst said he already had factored in a reduction in Enron's fourth-quarter EPS, to 40 cents from 48 previously, because of those expected issues. However, he now expects fourth-quarter EPS of 25-35 cents. 
As for the Dynegy deal, Launer sees a 90 pct probability that it will be completed, as Dynegy "demonstrably benefits from it and Chevron Texaco supports it." 
Yesterday, ChevronTexaco chairman David O'Reilly reaffirmed support for the company's decision to invest 2.5 bln usd in Dynegy. 
The Enron/Dynegy deal does contain a "material adverse change (MAC)" clause that could break the deal, but only if Enron liabilities exceed 2 bln usd net of insurance or reserves. 
In its 10Q filing, Enron also detailed its plans to dispose of 8 bln usd of non-core assets, mainly international and broadband assets. 
CSFB's Launer said his strong buy rating on Enron, reflects his expectations that the deal spread, currently at about 30 pct, will narrow as progress is made toward a closing. 
CSFB disclosed that Launer's immediate family owns shares of Enron, estimated at less than 250. 
ng/gc For more information and to contact AFX: www.afxnews.com and www.afxpress.com



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Andersen-Enron Audit Prompts Look at Peer Reviews (Update1)
2001-11-20 16:13 (New York)

Andersen-Enron Audit Prompts Look at Peer Reviews (Update1)

     (Adds information on accounting firms in seventh paragraph.)

     Washington, Nov. 20 (Bloomberg) -- An accounting industry
oversight group, prompted by concerns about Arthur Andersen LLP's
failed audits of Enron Corp., plans to look at the adequacy of
letting U.S. audit firms police one another, said the group's
chairman, Charles Bowsher.

     The question for the Public Oversight Board involves the
industry's system of ``peer reviews,'' in which auditors submit
their reports on public companies for examination by other
accounting firms, in an effort to assure investors the audits
comply with accounting standards.

     ``How can you have peer reviews and still have these kinds of
failures?'' Bowsher, a former U.S. comptroller general, asked in
an interview. The board's examination will consider the broad
issue of industry oversight, leaving specific review of Enron's
audits to the Securities and Exchange Commission, he said.

     Houston-based Enron, the largest energy trader, this month
said it overstated earnings by $586 million over four-and-a-half
years, inflated shareholder equity by $1.2 billion because of an
accounting error, and failed to consolidate results of three
affiliated partnerships into its balance sheet.

     The oversight board, created to supervise the accounting
industry's self-governance practices, will address the issue Dec.
4, Bowsher said.

     Andersen, the world's fifth-largest accounting firm, was
Enron's outside auditor for more than a decade, assuring investors
that the company's financial statements conformed with generally
accepted accounting principles. Deloitte & Touche LLP has been the
firm assigned to do Andersen's peer reviews.

                      Dingell Skeptical

     U.S. Representative John Dingell, a Michigan Democrat,
questioned the peer review process yesterday in a letter to
Bowsher. None of the five biggest international accounting firms
has ever issued a negative peer-review report against another,
Dingell said. The so-called Big Five are Andersen, Deloitte &
Touche, PricewaterhouseCoopers LLC, KPMG LLP, and Ernst & Young
LP.

     ``There appears to be little reason for the public to have
faith in Andersen or the peer review process,'' Dingell wrote.

     Andersen responded that it has faith in the accounting
profession's self-regulatory process, which the POB oversees.

     A spokeswoman at Deloitte & Touche didn't return a telephone
call seeking comment.

     The oversight board was thinking of looking into peer review
issues before receiving Dingell's letter, Bowsher said. ``But this
letter certainly focuses the issue,'' he said.

                      Conflict of Interest?

     Dingell's letter said the outside counsel to a special
committee of Enron's board has retained Deloitte & Touche --
Andersen's peer reviewer -- to help it examine the company's
accounting problems.

     ``Do (Deloitte & Touche's) dual roles create a conflict of
interest?'' Dingell's letter asked. ``If (Deloitte & Touche) finds
numerous problems on Enron, will (Deloitte & Touche) try to
`whitewash' or reconcile them in order to be able to issue a clean
peer review report?''

     Dingell also questioned whether the money Andersen pays
Deloitte & Touche for its peer review will sway the outcome.

     ``How will this influence, if at all, (Deloitte & Touche's)
`independent' judgment of Andersen's work on Enron?'' Dingell
asked.

     Bowsher there is ``nothing we can do to change the fact that
Deloitte & Touche has done the previous reviews of Andersen. Now,
the question is should they (the outside counsel) use the same
firm, or would it be better for them to use another firm? And
that's pretty much their decision.''

                         Expanded Power

     Dingell's request could prove a test of the oversight board's
expanded power and oversight. The group's charter was revised
earlier this year to make the board the accounting industry's
premier watchdog group, following criticisms by former SEC
Chairman Arthur Levitt and former SEC chief accountant Lynn
Turner. They criticized an ``alphabet soup'' of accounting self-
regulators and voiced frustration with the industry's oversight of
itself.

     The new charter put the oversight board in charge of
supervising the setting of auditing and audit-independence
standards and monitoring how firms audit public companies. It also
gave the board, which is funded by the industry, the power to set
its own budget with no strings attached.

     ``Now, for the first time, we will see if the POB is able to
act in the public interest and undertake the mandate presented to
it by Congressman Dingell and by its new charter,'' Turner said.
``They didn't have the power in the past.''

      The Public Oversight Board was set up in 1977 to represent
the public interest in overseeing the accounting industry's self-
governance structure. Before its charter was revised, the board
was just one facet of the enforcement of auditing industry
standards regarding publicly traded companies. Now, it oversees
the activities of these other groups as well.



Energy Cos Limit Business With Enron After 10Q -Traders
By Mark Golden
Of DOW JONES NEWSWIRES

11/20/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Many energy trading companies were unwilling to sell power and natural gas for next day delivery to Enron Corp. (ENE) Tuesday morning, a result of heightened credit concerns following the release of Enron's quarterly financial report Monday, traders and other sources said. 
For weeks, companies have limited both buying and selling with Enron for future deliveries. But for the first time since Enron's troubles began a month ago, energy companies weren't selling to Enron in the spot markets for fear that Enron might not be able to pay its bills as soon as next month.
"It's pretty well accepted in the industry that people are staying away for now," said Charlie Sanchez, energy market manager for Gelber & Associates in Houston. 
Traders at all of the major companies contacted said they couldn't sell to Enron Tuesday morning. Several spokespeople for energy companies confirmed the situation, but declined to say so on the record. 
"Nobody will take Enron," one western electricity broker said. After struggling, however, that broker eventually found a utility that was willing to sell to Enron Tuesday morning. 
Calpine, a prominent independent power producer and trader, said it was willing to sell power to Enron. 
"We continue to sell power to Enron and are monitoring the situation closely," spokeswoman Catherine Potter said. 
The situation Tuesday morning was fluid. One utility that refused to sell to Enron in the morning was willing to do so in the afternoon, a person at the company said. That company's trading, however, was still limited to the spot markets. 
Credit concerns about the once-dominant energy trading company were heightened with Enron's filing of its third quarter annual report Monday evening with the U.S. Securities Exchange Commission. 
Enron may have to pay $690 million on a note that became a demand obligation with the company's most recent credit-rating downgrade, Enron said in Monday's filing. The company also warned that its profits in the fourth quarter could be hurt by credit concerns, a decline in asset values and reduced trading activity. 
"The 10Q in and by itself is a document that could raise concerns," Fitch analyst Ralph Pellecchia said. "We have a lot of questions outstanding relative to disclosures that were new to us and their strategies of how they are going to manage the situation." 
Companies are willing to buy from Enron in the spot gas and power markets, because taking delivery on commodity and paying for it a month later poses no credit risk for the buyer 

An Enron spokesman didn't respond to a request for comment. 
Reliant Resources (RRI) and the Bonneville Power Administration, the federal government's western power marketer, both said their organizations are continuing to "do business" with Enron. But when asked specifically if they were selling spot power or gas to Enron, spokesmen for both declined to comment. 
"We're watching the situation very carefully," said Reliant spokesman Richard Wheatley. "There is a lot of speculation because of the filing yesterday." 
Energy companies began shying away from Enron over the past month, as concerns about its finances precipitated a 75% drop in its stock price and left its bonds trading at levels typically associated with junk-rated debt. 
Traders and their companies have said consistently that until Enron's credit ratings improve, they will continue to watch their exposure to Enron carefully, with trades limited to short-term deals. 
Moody's Investors Service, Standard & Poor's and Fitch all rate Enron one notch above speculative grade. Moody's has Enron's ratings on review for a downgrade, and S&P has Enron on negative credit watch. Fitch calls Enron's credit rating "evolving." Enron's ability to do business in the energy markets depends on its maintaining investment-grade ratings. 
The manager of one hedge fund that follows Enron closely said Tuesday that several trading companies expressed strong concerns about Enron's financial viability. But the manager thought those concerns weren't proportionate to Enron's position. 
"They have nine days to work out the $690 million debt payment, and if they can't work it out, they have the cash to make the payment," the manager said. 
Dynegy Inc. (DYN), which has agreed to buy Enron in a stock-swap currently worth about $10 billion, injected $1.5 billion into Enron last week. Enron has also closed on $1 billion worth of revolving credit lines with J.P. Morgan Chase & Co. (JPM) and Citigroup (C) in the past week, with $450 million of that amount closed Monday. 
Developments with Enron, however, have raised enough concerns that energy companies aren't willing to extend themselves into positions that have even the appearance of vulnerability, Sanchez of Gelber & Associates said. 
"The industry has been shell-shocked by their recent announcements, and they're not ready to go back to trading with them," said Sanchez of Gelber & Associates. 
Some traders wondered why Dynegy hasn't stepped in to buy energy from sellers and then sell that product to Enron. Such a move, known as "sleeving" in energy markets, serves as an ad hoc form of credit guarantee one transaction at a time. 
Dynegy didn't return phone calls on the matter. 
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com 
(John Edmiston in Houston, Kristen McNamara in New York and Jon Kamp in Chicago contributed to this article.) 

Reached later, Dynegy made clear it wouldn't take any extraordinary measures to support Enron in the market. 
"We will operate as two separate companies until the merger is completed," Dynegy spokesman John Sousa said. "We have to act independently." 
Mirant Corp. (MIR), a major trader of North American power and case, has trimmed its business with Enron. 
"We're trading on a very limited basis," said spokesman Chuck Griffin, who wouldn't be more specific. 
Cinergy Corp. (CIN), a mid-sized energy trading company, said it is buying and selling gas and power with Enron. 
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com 
(John Edmiston in Houston, Kristen McNamara in New York and Jon Kamp in Chicago contributed to this article.)



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
US FERC Denies Regulatory Waiver For Dynegy LNG Terminal

11/20/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
WASHINGTON -(Dow Jones)- The Federal Energy Regulatory Commission denied Tuesday Dynegy Inc.'s (DYN) request for regulatory exemption of its planned liquefied natural gas, or LNG, import terminal on the U.S. Gulf Coast. 
In what would be the first new LNG import site in nearly two decades, Dynegy has proposed converting an existing terminal in Hackberry, La., to receive LNG imports at a rate of up to 750 million cubic feet a day with capacity to later expand up to 1.5 billion cubic feet a day.
In its August application to FERC, Dynegy said LNG import terminals should no longer face regulatory burdens designed in the 1970s. 
Tuesday, FERC said "there is no indication that Congress intended to remove commission jurisdiction over the siting, construction, and operation of LNG import facilities." The commission added that "there would be a regulatory gap without commission jurisdiction." 
FERC Chairman Pat Wood said it was a close decision to deny the company's request, although commissioners voted unanimously to do so. 
Commissioner William Massey said granting a regulatory waiver would have made it impossible to ensure open access to the LNG facility, which he described as "a gatekeeper to the U.S. market." 
Three of the four existing U.S. LNG import terminals are under strict FERC price regulations. Dynegy said these regulations and the guaranteed cost recovery they entail led to unnecessary LNG investment in the early 1980s. The company argued that LNG imports should be treated as "first sale" gas over which the commission has no jurisdiction. 
Dynegy announced the project in July and planned to begin receiving LNG shipments by the end of 2003. 
The project involves converting an existing liquefied petroleum gas terminal and dock to receive LNG. Dynegy plans to convert an LPG tanker under construction to carry LNG instead by the targeted fourth-quarter 2003 start of operations, and it would seek additional LNG tankers in 2004. 
Companies use LNG tankers and terminals to import gas from remote overseas gas fields in countries such as Algeria, Trinidad & Tobago and Venezuela. The gas is frozen until it condenses into a liquid and is carried in specially designed double-hulled tankers. At import terminals it's turned back into gas and fed into the pipeline system. 
Dynegy's Hackberry site is located about 22 miles southwest of Lake Charles, La., where CMS Energy Corp. (CMS) operates the only current LNG import terminal on the U.S. Gulf Coast. 
ChevronTexaco Corp. (CVX) holds a 26% stake in Houston-based Dynegy and plans to make a major new investment in the company to assist in its takeover of ailing energy company Enron Corp. (ENE). 

The commission also denied an alternative Dynegy request for LNG import authority without conditions. 
"We would have preferred a non-jurisdictional declaration, but we don't expect the FERC decision to have any impact on the viability of the project," a Dynegy spokesman said Tuesday. 
The target of beginning LNG deliveries at Hackberry by the end of 2003 is unchanged, the spokesman said. 
The company hasn't disclosed the cost of the project but says it will be less expensive than building from scratch because the site already has jetty and ship-berthing facilities. 
Dynegy argued the history of CMS' Lake Charles import terminal shows why FERC regulation of LNG is a bad idea. 
According to Dynegy, when the Lake Charles terminal temporarily shut in 1983 after only one year of operation, U.S. gas customers were left paying more than $577 million over several years to cover the mothballed terminal's construction costs. That terminal has since resumed accepting LNG deliveries. 
In a filing to the commission, Chevron supported Dynegy's case, arguing that LNG facilities are analogous to new gas fields that are outside FERC jurisdiction. 
But other filings by BP PLC (BP), which supplies LNG to the U.S. from Trinidad and Tobago, and utility Atlanta Gas Light (ATG) made the case that FERC needs to retain regulatory oversight to ensure market stability. 
Dynegy countered that BP might be biased by worries that an unregulated LNG terminal at Hackberry would reduce BP's current "dominance" in supplying LNG to the U.S. 

-By Campion Walsh, Dow Jones Newswires; 202-862-9291; Campion.Walsh@dowjones.com



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
USA: UPDATE 2-Enron stock hits decade low after debt warning.

11/20/2001
Reuters English News Service
(C) Reuters Limited 2001.
(Previous dateline NEW YORK, updates paragraphs 1-6 share price, S&P announcement) 
HOUSTON, Nov 20 (Reuters) - Shares of Enron Corp. plunged to their lowest level in more than a decade on investor concerns more debt problems loom at the crippled energy trading giant.
In late afternoon trade on the New York Stock Exchange, shares of Enron were off $2.16, or 23.8 percent, at $6.90, after touching an intraday low of $6.55 - a low not seen since May 1991. 
Enron was far and away the day's most-active stock, with more than 55.5 million shares changing hands. Volume was more than double the second most-active issue, Xerox Corp. 
"Everyone wants to sink the ship faster. This is a sell-off from yesterday's news which was hyped by the media," said Fulcrum Global Partners analyst Michael Barbis. 
Enron warned in a U.S. Securities and Exchange filing released after markets closed on Monday that it could be forced by next week to pay $690 million in debt because of a credit downgrade on Nov. 12. 
The filing made the stark statement that Enron would fail to be a "going concern" if a further credit cut forces it pay off $3.9 billion in debts to partnerships it is involved in. An early payoff of those debts would render Enron unable to service its revolving credit accounts, starting a downward spiral, it said. 
Meanwhile, credit rating agency Standard & Poor's said that it may again cut Enron's BBB-minus rating, which could trigger those debt payoffs. But the agency said Enron's liquidity issues were unlikely to derail its merger with smaller cross-town rival Dynegy Inc. 
NEXT WEEK'S DEADLINE 
Analysts said there were no surprising revelations in Enron's filing yesterday and that it should have no effect on plans by rival energy trader Dynegy Inc. to buy Enron. 
"The facts have not changed so dramatically for the stock to be down this magnitude," Barbis said. 
On Monday, Enron disclosed it is up against a Nov. 26 deadline, when it must deliver collateral against the debt owed to a third party in one of its myriad partnerships. 
If not, the partner has the right to liquidate all of the assets of the partnership, which include a Brazilian natural gas company that Enron was counting on selling to raise $250 million in cash. 
Enron is working to make alternative payment arrangements, since it can ill-afford to pay the debt now. Enron has already already maxed out its $3 billion credit line, secured roughly $2 billion in loans and is looking for more cash to stay afloat. 
"Enron has access to more than $3 billion in cash. They can pay off this note. They have cash coming in and are not illiquid," said Barbis. "The timing of the note could have been better, but Enron keeps cash on hand for situations like this. This will not undermine the Dynegy deal." 
On Monday, the Houston-based company also reduced previously reported 2001 third-quarter earnings by 3 cents per share and increased reported earnings for the first 9 months of the year by a penny per share.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
USA: Enron shares slide after debt warning.

11/20/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Nov 20 (Reuters) - Enron Corp. shares fell sharply in opening trade on Tuesday, the day after the humbled energy giant warned it could be forced to pay by next week a $600 million debt triggered by a credit downgrade last week. 
The shares were down 12.3 percent, or $1.11, to $7.95 on the New York Stock Exchange.
On Monday, the Houston-based company also reduced previously reported 2001 third-quarter earnings by 3 cents per share and increased reported earnings for the first 9 months of the year by a penny per share.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Business
Stock Market Analysis: Looking Out To Next Year
Rhonda Schaffler

11/20/2001
CNNfn: Market Coverage - Morning
(c) Copyright Federal Document Clearing House. All Rights Reserved.
RHONDA SCHAFFLER, CNNfn ANCHOR, MARKET CALL: Chuck Kadlec is our guest host tracking the sell off. You know, the Enron (URL: http://.www.enron.com/) story you know has been in the headlines now for weeks. But it`s one of these cases where if you invest in a stock and you sort of buy into the story, it`s very difficult for some investors who now lost a lot of money. And everyday it seems there`s a new revelation there. How do you counsel people to sort of, you know, catch things that even some of the street don`t catch? 
CHARLES KADLEC, J&W SELIGMAN: Well, it`s obvious you can`t catch them because, if we could have, we would have. The best analysts on the Street missed this one. I think the real message here is the importance of diversification. And I think it also raises some important questions about corporate governance at Enron. And there, clearly, was something missing not only among the senior executive officers of that corporation but the board of directors as well.
SCHAFFLER: In general, we`re seeing the markets just sort of retreat here. But it seems to be one of these sort of calm pullbacks we`ve talked so much throughout the show. The Dow started the day up better than 20 percent. 
The Nasdaq up about 30 percent from the lows. 
And the one situation we`ve had when the markets pulled back, through those couple of weeks, is the buyers always come back in. We know that fund inflows were up in October. We also know October sometimes is when we see bottoms in markets. Just historically it seems that it happens in October. The data on the fund flows, does that intrigue you at all? 
KADLEC: Well, I think it`s just another of those straws in the wind, if you will. The leading economic indicators being up 0.3 percent today. I wouldn`t bet the ranch on that single number, but it`s positive, better than expected. Positive inflows suggest that fear, which was not only impacting the market, was clearly impacting the economy, starting to recede that`s a positive. 
And I think individual investors are beginning to look beyond the immediate news into next year. And, you know, we`ve had nine recessions. Up until now, we`ve had nine recoveries. We`re probably in the middle of the 10th recession. And we`re going to have a recovery. So, as people begin to try to size up the shape and the duration of that recovery, they`re beginning to, again, deploy their assets back into equities, which provide the best long-term returns of any asset class. 
SCHAFFLER: It`s interesting too because, you know, we`ve talked through the last couple of months it was always the cash on the sidelines. You know, we kept quoting how much was in money market funds just waiting to be deployed. Do you have any sense of how much momentum there is still to come into this market? How much money there might still be out there? Do you get the idea that the institutions as well as some retail customers might still be holding on to some money to re-deploy assets at this point? 
KADLEC: My sense is that-like at Seligman, for example, our teams are really focused on positioning the portfolios and to take advantage of the upturn that`s coming. So you`re seeing a move more toward cyclicals. Selecting really good companies that perhaps are oversold. 
We`re also seeing horizons lengthen out a little bit. People beginning to think of what all of next year is going to look like. Really, very little attention to what`s happening in the fourth quarter of this year. We already know the economy`s in trouble. If anything, we`re set up for a positive surprise I think over the holiday season in terms of the consumer here. 
SCHAFFLER: Let`s find out exactly what`s going on now at the Big Board. 
We know that stocks are moving lower. 

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Deregulation Not Seen Leaderless After Enron's Collapse
By Bryan Lee
Of DOW JONES NEWSWIRES

11/20/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
WASHINGTON -(Dow Jones)- The movement to deregulate the country's electricity markets is about to find out whether it needs the 800-pound gorilla that has long sat in its corner. 
For years, Enron Corp. (ENE) has been the country's most aggressive advocate of opening energy markets to competition, and Enron is now on the ropes, slated if all goes as planned to be absorbed by smaller rival Dynegy Inc. (DYN).
But industry observers said its demise won't open a leadership void in the regulatory battle. While Enron's efforts were critical in the early efforts to pry open markets, that work has largely been done, and there are now plenty of like-minded companies able step in, observers said. 
"It is true that Enron has been a leader in pushing policies for a competitive market," said Linda Stuntz, a former top Energy Department official now with Stuntz, Davis & Staffier. "But the news is they're not alone any more. There are a lot of others who will carry the flag." 
Enron, an object lesson in how the mighty have fallen, has been the industry's undisputed leader in pushing for competitive power markets at both the federal and state levels. The company is a dominant player in any policy debate before the Federal Energy Regulatory Commission, and its positions weigh heavily as Congress debates electric industry reform legislation. 
Lobbyists describe Enron's Washington office as "huge," far surpassing that of Dynegy. 
Enron also had tremendous political clout. The company successfully backed top Texas regulator Pat Wood III for the FERC chairmanship earlier this year. Enron Chairman Ken Lay has been a key political backer of President George W. Bush, raising at least $100,000 for his campaign. The company itself contributed $114,000. 
Enron spent $2.4 million in the last federal election cycle, making it one of the nation's biggest political contributors, according to the Center for Responsive Politics, an advocacy group that monitors political campaign spending and influence. 
"The company's contribution total for the 2000 elections more than doubled its political donations in each of the two previous election cycles," the center reports. 
Broad Support Seen For Markets 

No company has come close to making Enron's commitment to shaping the laws and regulations that govern the energy industry. Still, industry observers see support for competitive energy markets even without Enron's largess. 
"I think that there is a tremendous political will from all the leaders on all sides of Congress and the administration to move forward on electricity competition legislation," said Edison Electric Institute President Thomas Kuhn. "I don't the think the Enron situation is going to make any difference at all. 
Officials with the two companies adamantly reject the premise that their merger will create a vacuum in the push for greater competition in the $220 billion electricity sector. 
"Dynegy's going to continue to advocate open and competitive markets," spokesman Steve Stengel said. "I can't speculate on what the new company is going to spend on lobbying efforts or what the combined entities' staff will look like. But clearly Enron and Dynegy share a belief in open and competitive markets, and the new entity will certainly continue to be vocal about opening markets to competition." 
Rick Shapiro, Enron's managing director of global government affairs, echoed that view. He also said it was unlikely opponents of deregulation would succeed in using Enron's troubles as a reason not to further open markets. 
"There will be companies that will try to use Enron's business problems as a reason to not move forward. But regulators will separate what happened to Enron from the rightness of the idea," Shapiro said. "The validity of competition has been proven over and over again. This is not going to have a long-term effect." 
Dynegy will probably inherit some of Enron's aggressiveness in lobbying, Stuntz said. 
State-Level View Mixed 

Energy lawyers suggested that, in many respects, the public policy debate over competition has already been won. For instance, one-third of the power-generation capacity in the U.S. is now owned by companies other than the utilities that once enjoyed monopolies, Stuntz said. 
"I'm not sure at the end of the day this really changes all that much," said William Scherman, a former FERC general counsel now with Skadden, Arps, Slate, Meagher & Flom. "In Washington, vacuums don't exit very long." 
While the collective view is that nothing will change at the federal level, the view was mixed in terms of the ramifications for efforts to open retail markets to competition. 
"More than any other company, Enron, on a national basis, has pushed for retail restructuring for gas and electricity," said Richard Meyers, senior regulatory counsel for the National Rural Electric Cooperative Association. "Enron has had great credibility with state legislators and state regulators. If state legislators and regulators were interested in retail restructuring, Enron was there. But now, Enron is not there, or its credibility is in question. This, and the events in California, can only seem to further slow down retail restructuring." 
California's electricity crisis has certainly done plenty to blunt moves by states to open their retail electricity markets. And Congress hasn't had opening up retail markets on its front burner for several years now. 
"If you're talking consumer choice and competition, that hasn't been a federal issue for so long," said Marc Yacker, a lobbyist for the Electricity Consumers Resource Council, a group representing large industrial electricity users. 
But in terms of the overall push for competition, Enron "certainly has been the 800-pound gorilla," Yacker said. "Whether there's a void remains to be seen." 
-By Bryan Lee, Dow Jones Newswires; 202-862-6647; Bryan.Lee@dowjones.com



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Enron Falls Amid Concern Debt Threatens Dynegy Bid (Update6)
2001-11-20 16:47 (New York)

Enron Falls Amid Concern Debt Threatens Dynegy Bid (Update6)

     (Adds Dynegy's Watson declined to comment on Enron filings in
final paragraph.)

     Houston, Nov. 20 (Bloomberg) -- Enron Corp. shares and bonds
dropped after the energy trader disclosed it may have to pay $9.15
billion in debt due by 2003, suggesting the company may run out of
cash before its takeover by Dynegy Inc. can be completed.

     Shares of Enron fell $2.05, or 23 percent, to $7.01. Earlier
they touched $6.55, the lowest price in more than a decade.
Enron's 6.4 percent notes due in July 2006 were bid as low as 69
cents on $1 of face value and offered at 73 cents, down more than
13 percent, traders said.

     Enron, whose dealings with affiliated partnerships led to
earnings restatements, credit-rating cuts, a federal investigation
and a management shakeup, said in a regulatory filing that it has
less than $2 billion in cash or credit lines. Dynegy plans to
complete its buyout by October, and Enron may have to ask lenders
to restructure payment schedules to survive.

     ``This filing shows that Enron is in a precarious financial
situation,'' said Commerzbank Securities analyst Andre Meade, who
rates Enron shares ``hold'' and doesn't own them. ``They have to
stay afloat for the Dynegy deal to go through, and that now looks
difficult.''

     Enron and Dynegy spokespeople wouldn't comment on the stock
drop today. Standard & Poor's Investors Service said that Enron's
credit rating remained on negative watch, indicating it wouldn't
immediately downgrade the company's debt.

                       $690 Million Surprise

     ``Enron's near-term liquidity position is ... expected to be
sufficient to carry the company through the completion of its
proposed merger with Dynegy,'' S&P said in a report.

      Investors were concerned the debt, including a $690 million
note that Enron disclosed it may have to pay off next week, would
lead to a cut in Enron's credit rating, analysts said.

      The filing was a ``distraction'' that will not threaten the
merger, said Todd Shipman, a director at S&P who follows Enron.

     ``Our approach to this has been on the basis that the Dynegy
deal is a good thing for credit quality,'' Shipman said.

     Moody's Investors Service, which didn't issue a statement on
Enron's debt today, kept the company's credit rating at investment
grade on Nov. 9, the day Dynegy announced it would buy Enron in a
deal now valued at $25 billion in stock and assumed debt.

      The ruling came after executives from Lehman Brothers
Holding Inc., J.P. Morgan Chase & Co. and Citigroup Inc.'s Salomon
Smith Barney lobbied the credit-rating company, people familiar
with the situation said.

                           Avoiding Junk

     A junk rating would have led Dynegy to abandon the
acquisition, Dynegy Chief Executive Officer Charles Watson said.
It would also have triggered debt repayment of at least $3.9
billion, Enron said in a Securities & Exchange Commission filing
yesterday.

     Enron shares are selling for almost 32 percent less than the
value of Dynegy's offer, showing investors have doubts the deal
will be completed. Dynegy shares fell $1.90 to $41.70 today.

     ``It's become more clear that the chances of this deal going
through aren't 90 percent, but much closer to fifty-fifty,'' said
Edward Paik, who helps manage the Liberty Utilities Fund, with 1.6
million Enron shares. ``There's just so much information that is
unknowable'' about Enron's financial position, he said.

     Most of the $9.15 billion in debt is due before the end of
the third quarter of 2002, when the Dynegy buyout is scheduled to
close, Enron said yesterday in a filing with the SEC.

                        Asset Sales Planned

     Last week, Enron Chief Operating Officer Greg Whalley said
the company will sell assets of ``non-core businesses'' to raise
money. It has $8 billion invested in the businesses, including
broadband telecommunications and the Dabhol power plant in India.
Enron expects to get ``billions'' from the sales, Whalley said,
without being more specific.

     Enron reported yesterday that its U.S. operations had $1.2
billion in cash left. It has added at least $5 billion since Sept.
30 from credit lines, loans and a $1.5 billion investment from
ChevronTexaco, part owner of Dynegy.

     Enron used $1.9 billion of the money it raised to retire
commercial paper, which is short-term debt. It gave no details on
how it spent the remaining $3.1 billion.

     Enron Chief Financial Officer Jeffrey McMahon said last week
that the company also was looking to get another $500 million to
$1 billion from private investors.

     Asset sales valued at about $800 million are expected to
close by the end of this year, according to the SEC filing. Enron
spokeswoman Karen Denne wouldn't comment on whether it could sell
assets fast enough to keep current on its debts.

     Dynegy will have to help Enron sell assets, said Mitchell
Stapley, who manages $3.5 billion in fixed-income assets including
Enron bonds for Fifth Third Investment Advisors Inc.

     Dynegy and ChevronTexaco Corp., which owns 26 percent of
Dynegy, also will have to help Enron negotiate with its lenders,
said Kathleen Vuchetich, who helps manage the $1.4 billion Strong
American Utilities Fund, which is 5 percent Dynegy shares.

                          Debt Questioned

    ``I never dreamt (the $9.15 billion) would be that large,
coming due all at once,'' Vuchetich said. ``It calls into question
their decision to schedule it that way in the first place.''

     ChevronTexaco, the second-largest U.S. oil company, is
providing $2.5 billion in cash as part of the Enron buyout. It
provided the first $1.5 billion a week ago. In exchange for that
investment, Dynegy will get a pipeline valued at more than $2
billion if the Enron purchase is not completed.

     Shares of ChevronTexaco, based in San Francisco, rose $3.62
to $86.53.

     Enron yesterday reduced third-quarter results by 3 cents a
share, bringing the period's loss to 87 cents, or $664 million. On
Nov. 8, Enron lowered earnings back to 1997 by $586 million to
reflect losses by affiliated partnerships that were wrongly kept
off the books. That included a third-quarter reduction of $17
million.

     A drop in Enron's senior unsecured debt rating to ``BBB-'' by
Standard & Poor's on Nov. 12 may force Enron to pay off a $690
million note by Nov. 27 if it doesn't find collateral to guarantee
the debt taken on by an affiliated partnership that owns Brazilian
natural-gas assets, the filing said.

     Without repayment or collateral, investors can begin to
liquidate the partnership's assets, Enron said. The company said
it's working with lenders to come up with an acceptable agreement
on the debt.

     Making good on debt owed by its Whitewing affiliated
partnership may cut Enron's fourth-quarter earnings, Enron said.
Enron is obligated to back Whitewing by issuing junior convertible
preferred stock. Because Enron's stock has plunged, it may have to
write down its assets by $700 million, the filing said.

     Dynegy's Watson said when the Enron buyout was announced that
he was convinced Enron's trading operations are sound, and he
called disclosure about financial partnerships such as Whitewing
as ``financial noise.'' He declined a request to comment today on
Enron's latest filings, Dynegy spokeswoman Jennifer Rosser said.


Enron BBB- rating on CreditWatch negative - S&P

11/20/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
NEW YORK (AFX) - Standard & Poor's said its 'BBB-minus' and "A-3" ratings for Enron Corp will remain on CreditWatch with negative implications, which is one notch above junk status after the ailing energy group warned it may have to pay off a 690 mln usd note next week. 
In a statement, the rating agency also said Enron's near-term liquidity position is "expected to be sufficient" to enable it to merge with Dynegy Inc, in a deal scheduled to close in the third quarter of 2002. 
Yesterday, Enron warned that it faces heavy debt repayment obligations in less than 10 days, and has reduced its already-reported third-quarter earnings.
In a 10Q filing with the Securities and Exchange Commission, Enron said that because of a credit rating downgrade last week, it now faces a debt payment of 690 mln usd by Nov 27. 
Enron also said it may have to pay 9.15 bln in debt due by 2003, suggesting the company may run out of cash before its takeover by Dynegy can be completed. 
The group also restated its third-quarter earnings, lowering them by 3 cents per share. 
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