BBB+ credits dont go bankrupt overnight.  we can get downgraded overnight, though.  put a clause in the contract that if we get downgraded below inv grade there is some sort of orderly liquidation of the swaps.  talk to credit about how we handle this with others.

-----Original Message-----
From: Abramo, Caroline 
Sent: Thursday, September 27, 2001 7:12 AM
To: Arnold, John
Subject: RE: EQUITY COMMENTS


any thoughts on how to give people comfort that we are not going bankrupt?  
 
we can talk about it next week.

-----Original Message-----
From: Arnold, John 
Sent: Wednesday, September 26, 2001 4:52 PM
To: Abramo, Caroline
Subject: RE: EQUITY COMMENTS


thx for the update.  funny how the banks will deal with us and ospraie won't.  oh well, nothing we can do.

-----Original Message-----
From: Abramo, Caroline 
Sent: Tuesday, September 25, 2001 10:43 PM
To: Arnold, John
Subject: EQUITY COMMENTS


Hi- thought you'd want to know some of the recent equity comments from a few of the funds.  Bad comments first.. ENE: Ospraie, one of the Tudor funds has actually been reducing all their trading exposure to us becuase of our "credit situation".  At one point they probably had a 12,000 contract short gas position with us where we might have 1000 lots on now.  They have studied our financials for the last 2 years and like the rest of wall street can not determine how to value us.. I think the bigger concern though is our credit line situation.  Its been leaked that the availability of our borrowing is linked to stock price.. obviously the street does not know the real details but the fact these rumors are out there and lack of statements by us to the contrary are causing some to panic.  I've heard the same come out of SAC which is a 5 B equity shop who also put on the favorite short-ENE.  SAC has just started trading with us.
 
I am not sure what to do about this.. luckily Ospraie is the only group commenting on our credit.  I am not having any problems YET with any of the banks except CSFB- and thats not new.. I have not been able to trade with them for the last year.  I am anticipating problems which is why I am trying to work out a clearing system in the interim.
 
I am sure Ken will do a better job of putting some of these fears to rest.. and the street will be able to assign us a PE in line with other trading companies (8-10) plus some growth component (5) for developing businesses.  And at $20, they reckon we get taken out anyway.. the fact remains that Enron has major franchise value.
 
Good news- Ospraie covered their short at $30 when PGE resiolution came out Thursday and we rallied $4.
 
Other comments from Catequil.. they generally think a lot of the energy sector (E+Ps) are close to bottom.  They also commented that they are likely to buy El Paso at a 10.5 PE soon (even though ours is currently 12.5 and they believe in us) because they just have more access to El Paso Sr Mgmt and understand their biz better.  (Lot of El Paso and Dynegy support out there).  They were never short us.
 
On other names:
EOG- could see it down to $22 but see $35 based on NAV more realistic.  Like EOG and Chesapeake- well hedged.
 
Also like Philips/ Statoil on the Alaskan gas play as well as the fact that they have 0 mid-east exposure.
 
Like Talisman- only has exposure in Sydan, Nexus- Yemen