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Enron Mail |
Bloomberg also asking questions for a story. Vance Meyer -----Original Message----- From: Schmidt, Ann M. Sent: Friday, November 16, 2001 4:08 PM To: Meyer, Vance Subject: =DJ Enron Set To Close/Revolver -2: Pipelines Support $1 Bln =DJ Enron Set To Close/Revolver -2: Pipelines Support $1 Bln 2001-11-16 16:56 (New York) By Michael Barr Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Embattled energy services company Enron Corp. (ENE) said Friday that it closed on one revolving credit agreement earlier this week and expects to close on another one Monday for a total of $1 billion in new credit. The $1 billion is crucial to Houston-based Enron's efforts to regain investor confidence, which has been badly eroded. Concerns about Enron's finances precipitated a 75% drop in its stock price over the past month and left its bonds trading at levels typically associated with junk-rated debt. Chase Manhattan Bank (JPM) and Citibank, N.A. (C) closed a revolving credit agreement in the amount of $550 million with Enron subsidiary Transwestern Pipeline Co. on Wednesday, according to company spokesman Mark Palmer. And the company expects the same two banks to close a $450 million revolving credit agreement with its Northern Natural Gas Co. subsidiary on Monday. Original conditions in the credit agreements that could have prevented the closings have been removed, Enron spokesman Mark Palmer said. The agreements required that Enron be rated at least triple-B-minus by Standard & Poor's and Baa3 by Moody's Investors Service and accompanied by a stable outlook. While Enron is rated triple-B-minus and Baa3, Moody's has Enron's ratings on review for a downgrade and S&P has Enron on negative credit watch. The rating agencies use the outlook system as an indication of the direction of a possible future rating revision. "Both banks removed the `stable' requirement," Palmer said, allowing the closings to proceed. Enron reached agreement on the credit lines Nov. 1, after the company drew down all its previously available credit facilities to buy back its outstanding commercial paper and raise cash. Last week, energy-industry rival Dynegy Inc. (DYN) announced it had reached an agreement to acquire Enron in a stock swap now valued at about $10 billion plus assumed debt. Without the agreement, Enron's ratings would fall to speculative grade, S&P has said. Enron restated four and a half years' worth of financial reports last Thursday because of questionable partnership arrangements, lowering its earnings over the period by 20%. Resulting downgrades by Moody's and S&P led some energy companies to severely restrict their business with Enron. -By Michael C. Barr, Dow Jones Newswires; 201-938-2008; michael.barr@dowjones.com
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