Subject: FW: CSFB IPP Weekly: DYN/ENE Deal Mitigates Overhang; MIR MeetingPre view; New Regional Spark Spread Analysis
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Date: Mon, 12 Nov 2001 06:01:29 -0800 (PST)

-----Original Message-----
From: Stein, Neil [mailto:[email-masked]]
Sent: Monday, November 12, 2001 7:26 AM
To: undisclosed-recipients
Subject: CSFB IPP Weekly: DYN/ENE Deal Mitigates Overhang; MIR
MeetingPre view; New Regional Spark Spread Analysis

 <<IPW111201a.pdf>> 
Good Morning,

Attached, please find the latest issue of our Independent Power Weekly.

Summary:
1. IPPs Rise 3.8%   Last week our IPP composite rose 3.8%, outperforming the
S&P 500 (+3.0%), but underperforming the NASDAQ (+4.7%).  Mirant, which was
up 12.9%, was the strongest generator in the group.  International Power was
the weakest performer, declining 2.4%.

2. Generation Oriented Utilities Rise 5.5%   Our universe of generation
oriented utilities rose 5.5%, outperforming all major indices including the
UTY (4.0%).  Constellation Energy, which was up 8.6%, was the strongest
performer in the group.  Cleco Corp was the weakest performer, improving
3.4%.

3. DYN/ENE Deal Removes Overhang   We attribute last week's strong
performance to indications of an imminent resolution to Enron's financial
difficulties in the form of an investment from Dynegy.  Late on Friday,
these reports proved true with Dynegy agreeing to acquire Enron and provide
immediate liquidity support.  Over the last few weeks, the group came under
pressure owing to concerns about Enron's deteriorating credit quality.  In
particular, IPP investors were concerned about the level of receivables
exposure of various companies to Enron.  Further, some industry observers
suggested that a damaging reduction in trading liquidity could result if
Enron were forced to withdraw from the natural gas and power markets.  

4. New Feature: Regional Spark Spread Analysis   Inside we include a
regional spark spread analysis looking back 2 years.  Going forward, this
analysis will be a regular feature in the Weekly.

5. Valuations Remain Attractive; Focus On the Major IPPs: Highlighting CPN,
MIR and NRG   Given diminishing Enron concerns, we would expect investors to
refocus on attractive valuations across the sector.  The pure play power
producers are trading at a 12% average discount to their private market
asset values.   We continue to highlight Calpine, Mirant and NRG Energy.  

6. MIR Hosting Analyst Seminar   On Tuesday (11/13), Mirant will host its
second major analyst meeting in Atlanta, Georgia.  We expect management to
discuss the following: 1. Business plan update; 2. 2002 earnings visibility;
3. Financing plans; and 4. Reaction to DYN/ENE deal.

7. CSFB Philippines Energy Forum; Relevant to MIR   On 11/15 at 3.30 pm CSFB
will host a Philippines Energy Forum at the Waldorf Hotel in NYC.  The
meeting will feature 3 speakers: 1. Her Excellency Gloria Macapagal Arroyo,
The President of the Philippines; 2. the Honorable Vincent S. Perez, Jr.,
Secretary of the Department of Energy of the Philippines; and, 3. Rick
Kuester, CEO of Mirant Asia Pacific.  The forum will focus on upcoming
developments and opportunities in the power and oil/gas industry in the
Philippines.

Regards,

Neil Stein   212/325-4217

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