Fate of 21 FIs, energy cos’ exposure in Enron hangs fire

Sanjay Jog

Mumbai, Dec 3: Analysts are worried over the fate of financial exposure of 21 financial institutions (FIs) and energy companies comprising Dynegy Inc to the now beleaguered Enron Group. These companies and FIs are mainly from the US, the UK, Germany, Australia, Japan and Dutch. Dynegy has filed a $10 billion suit against Dynegy for termination of the proposed acquisition.

The list of FIs included: Abbey National and UK Bank having exposure of $164 million to the Enron Group. ABN Amro, the Dutch bank disclosed a potential exposure of $98 million, ANZ Banking Group has direct exposure of $69 million and an indirect exposure of $51 million, Chubb estimates that its maximum net pre-tax exposure under outstanding surely bonds issued to various obligees in connection with Enron commitments is about $220 million, CIBC reported it has credit exposure to Enron entities of $115 million in senior unsecured loans, letters of credit and derivatives. In addition, CIBC confirmed it has secured exposures of approximately $100 million, Daiwa Asset Management, the Japanese bank has an exposure of $140 million, JP Morgan Chase has unsecured exposure of $500 million including loans, letters of credit and derivatives. It also has additional exposure that is secured including $400 million in loans secured by the Transwestern and Northern Natural pipelines and National Australia Bank has an exposure of $104 million.

The list of energy companies includes: Dynegy, having $75 million exposure, American Electric Power has $50 million worth exposure, BP, the UK integrated oil group’s maximum liability is around $28 million, Centrica, the UK’s biggest gas supplier, working to cut its trading exposure to Enron is estimated at $42.8 million, Duke Energy has $100 million in non collaterised exposure, El Paso’s maximum natural gas and power net trading exposure is $50 million, Exelon Power Team’s direct exposure to Enron, based on its current book of business and existing market prices, is less than $10 million. The current direct gross exposure including current energy sales from Exelon to Enron is less than $20 million.

KeySpan and its subsidiaries have less than $4 million of exposure after tax, Mirant’s current pre-tax exposure to Enron is $50 million to $60 million, Reliant Resources’ current exposure is $80 million, RWE of Germany estimated its net exposure at around $8.9 million, Western Gas Resources has pre-tax credit exposures to Enron of $2.3 million for currently outstanding transactions and Williams has its net exposure of less than $100 million.