-----Original Message-----
From: jdietert@simmonsco-intl.com [mailto:jdietert@simmonsco-intl.com]
Sent: Monday, April 29, 2002 12:31 PM
To: Sales_Trading@simmonsco-intl.com
Subject: DYN($15/sh): Additional Detail on Collateral---CORRECTED.


In our earlier note we confused the collateral requirements disclosed in
DYN's 10K.  As stated in the 10K, in the event of trigger, Catlin, LLC and
West Coast Power would require a total of $301MM in collateral.  This is
comprised of $270MM from Catlin (the trigger would require both Moodys &
S&P to downgrade) and $31MM from West Coast Power (which we believe only
requires one agency to downgrade).  These corrections do not change our
total collateral estimate of up to $1B.  This was our mistake and we
apologize for the confusion we have created related to this issue.

Simmons estimates for DYN's collateral requirements:

Assuming one agency downgrades to below investment grade:
Existing Trading book, $300MM (Simmons estimate),
West Coast Power, $31MM (from DYN 10K)
Incremental business, $300MM (Simmons estimate)
Total required-roughly $630MM, assuming one agency downgrades

Assuming BOTH S&P & Moodys downgrade to below investment grade:
Collateral provided above, $630MM
Catlin, LLC, $270MM (from DYN 10K)
Incremental misc. collateral, $100MM (Simmons estimate)
Total required-roughly $1B, assuming both agencies downgrade

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ORIGINAL NOTE:

DYN's 10K (page 27) provides some of the detail in our thinking on
collateral.  Assuming a single downgrade in credit rating, DYN disclosed
that its existing business would require $301MM in collateral (as of
12/31/01) and that West Coast power would require $31MM.  We estimate that
incremental transactions would require an additional $300MM, for a total
collateral requirement of roughly $650MM in the event of a Moodys downgrade
(only).  A downgrade by BOTH Moodys and S&P would trigger an additional
$270MM associated with Catlin, LLC (DYN's Midwest generation financing
vehicle), bring the total collateral to just under $1B.


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