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CNN Live At Daybreak

Enron Collapse Sends Creditors Reeling

Aired November 30, 2001 - 06:42   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Let's check in on business news. And in the business world just about everyone from stock investors to big- name creditors is still reeling with word of the collapse of energy trading giant, Enron. Experts are predicting the company could file for bankruptcy as early as today.

More now from CNN's Allan Chernoff.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN FINANCIAL NEWS (voice-over): Because Enron's credit rating has been downgraded to junk status, the company is obligated to pay off the share trust partnerships within four months, a total of $3.9 billion. Add to that, $2.1 billion due this quarter of bank loans and debt service. The next payment is $55 million due next Thursday, according to credit market participants.

TODD SHIPMAN, RATINGS ANALYST, STANDARD & POOR'S: They do not have any kind of a severe liquidity problem in the very near term. The problem is more in the, I guess, medium term as things become due over the next couple of months.

CHERNOFF: Enron has a broad list of creditors, including the bankers who tried to shepherd Dynegy's takeover offer. JP Morgan Chase says it has $500 million in unsecured Enron debt, and $400 million secured by Enron pipelines. Analysts say Citigroup has $500 million invested, though the company refused comment.

Other U.S. banks with exposure: Bank of America, $500 million, Bank One, $300 million, and Wachovia, $50 million, according to CS First Boston. Overseas bankers today said they are at risk as well, including Credit Lyonnais with commitments of $250 million.

Many energy companies have exposure from their trading activities, though they say they have been reducing their dealings with Enron in recent weeks.

The president of energy trader, Aquila, says his company has a $50 million exposure.

ED MILLS, AQUILA: And although that's not an insignificant number, it is a very manageable number for us, and we're looking forward to a very orderly transition. CHERNOFF: Duke Energy says it has exposure of about $100 million; Williams, less than $100 million. The company, today, saying it expects to meet or beat earnings targets; El Paso Corporation about $50 million, Reliant Resources, $80 million, and Mirant, $50 to $60 million.

(on camera): ChevronTexaco invested $1.5 billion into Dynegy on November 9. The company now has the right to increase its ownership stake in Dynegy to 35 percent from 26 percent or ask for its money back in two years. Investors don't appear overly concerned. In fact, ChevronTexaco stock rose 90 cents Thursday.

Allan Chernoff, CNN Financial News, New York.

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