----- Forwarded by James D Steffes/NA/Enron on 02/27/2001 01:08 PM -----

	Michael Tribolet/ENRON@enronXgate
	02/27/2001 09:41 AM
		 
		 To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, James D 
Steffes/NA/Enron@Enron, David W Delainey/HOU/EES@EES, 
jklauber@llgm.com@SMTP@enronXgate
		 cc: 
		 Subject: Transmission value and first mortgage debt

 

The proposed purchase of the PGE and SCE's transmission grids have vastly 
different short term liquidity effects for PGE and SCE.   If the current 
proposal is at 2.3x book, and assuming the first mortgage bond holders want 
complete repayment in return for releasing their liens, the numbers (at 
12-99) fall out:

in millions                   PGE        SCE

Book Value                    1.43       1.90
Multiple of Book              2.3x       2.3x
Cash Price                   $3.29      $4.37

-First Mortgage Bonds        $3.35      $1.18
Resulting liquidity         ($0.06)     $3.19


Note that the first mortgage holders may release their liens in return for 
partial payment based on remaining value.  Nonetheless, PGE's situation is 
not as flexible.