fw : trading article fyi . . .
energy cos limit business with enron after 10 q - traders
by mark golden
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 10 q 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 .
fw : trading article
fyi . . .
energy cos limit business with enron after 10 q - traders
by mark golden
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 10 q 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 .