FW:

---------------------- Forwarded by Kay Quigley/HOU/EES on 10/29/2001 04:26 PM ---------------------------
From: Kathleen Sullivan/ENRON@enronXgate on 10/29/2001 02:53 PM
To: Kay Quigley/HOU/EES@EES
cc:
Subject: FW:

-----Original Message-----
From: Barnes, Lynnette
Sent: Monday, October 29, 2001 2:38 PM
To: Sullivan, Kathleen; Reyna, Margo
Subject:

Enron's debt ratings cut
Moody's Investors Service on Monday cut Enron Corp.'s senior unsecured debt rating to two steps above junk-bond status, and warned it may cut the rating again, as well as its rating for Enron's commercial paper. The ratings agency cut Houston, Texas-based Enron's senior unsecured debt to "Baa2"from "Baa1", and said it may cut Enron's "Prime-2" commercial paper rating. Its rating actions affect $13 billion. According to Moody's, Enron is suffering from deteriorating financial flexibility since it announced big write-downs and equity charges from previously undisclosed partnership investments.

Enron, which has about $63.4 billion in energy assets, said on Monday it is talking with banks to get more credit, after last week drawing down $3 billion from a bank credit line to buy back outstanding commercial paper.

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