Message-ID: <18233663.1075845451068.JavaMail.evans@thyme> Date: Mon, 9 Apr 2001 01:25:00 -0700 (PDT) From: benjamin.morton@ssmb.com Subject: Bankruptcy in California; Implications for our Growth Energy Name s Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "Morton, Benjamin [EQRE]" X-To: X-cc: X-bcc: X-Folder: \Greg_Whalley_Oct2001\Notes Folders\Connect deletes X-Origin: WHALLEY-G X-FileName: gwhalley.nsf Bankruptcy in California; Implications for our Growth Energy Names * We would not sell Energy Merchants/Power Producers on news that PCG has declared Chapter 11 bankruptcy. * Ongoing payments in California are being made by the state; therefore do not anticipate material exposure for ongoing earnings. * Primary exposure is current receivables: (1) these one-time amounts are limited (roughly estimate max. of 50% of 2001 earnings); and (2) we expect that, as trade creditors, they will get high priority in a bankruptcy proceeding. We think most of these amounts are likely to be recoverable, although a significant (perhaps several year) delay is possible as these claimants work their way through the bankruptcy process. * By our rough estimation, companies with fairly significant one-time earnings exposure include: NRG, MIR, DYN, CPN. Companies with fairly small exposure include: ENE, AES, WMB, EPG and DUK. <> <> Raymond C. Niles Power/Natural Gas Research Salomon Smith Barney (212) 816-2807 ray.niles@ssmb.com s - PCG bankruptcy 4-9-01.pdf - PCG bankruptcy 4-9-01.doc