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Enron Mail |
Jerry:
Stan is in California at the KEYEX meeting today and tomorrow. What do y= ou=20 suggest? Cindy From: Jerry Peters/ENRON@enronXgate on 04/12/2001 11:39 AM To: Stanley Horton/Corp/Enron@Enron, Ben Glisan/HOU/ECT@ECT, Kelly H=20 Boots/HOU/ECT@ECT, Mark Koenig/Corp/Enron@ENRON cc: Rod Hayslett/ENRON@enronXgate, Bill Cordes/ENRON@enronXgate=20 Subject: NBP Underwriting Group Attached is a short memo on our selection rationale for the underwriting=20 group for a planned (mid-May) equity offering of about $130 - $150 million= =20 for Northern Border Partners. Some of these firms may be contacting you, s= o=20 this should be helpful in fielding those calls. With this group we are=20 attempting to balance our placement into firms that have substantial NBP=20 holdings (UBS Warburg, AGE) and diversify and expand holdings in other majo= r=20 systems (SSB, Banc of America, First Union). Please note that for the firm= s=20 not selected, i.e. Lehman, Goldman and Merrill, part of our rationale was t= o=20 hold these systems for a potential offering later in 2001 that could be=20 accomplished on a sole-managed basis for up to about $50 million. Kelly: As Ben requested, the underwriting fees are expected to be about=20 4.25% and the breakdown by firm will be provided when we have determined th= e=20 allocations. Let me know ASAP if you have any questions or concerns as we will begin=20 discussions with these firms tomorrow. -----Original Message----- From: Jesse, John =20 Sent: Thursday, April 12, 2001 8:03 AM To: Peters, Jerry Subject: NBP Underwriting Group Importance: High The following provides the rationale supporting the recommended underwriter= =20 group for Northern Border Partner=01,s upcoming equity offering. Please no= te=20 that underlying the entire selection process is the fact that MLP units are= a=20 specialized product sold to a more limited group of investors vis-.-vis=20 common stock. Thus, sheer underwriting bulk or equity league table positio= n=20 of a given firm does not necessarily indicate the expected performance of= =20 such firm in an NBP offering.=20 Lead Manager - Salomon Smith Barney SSB controls an impressive retail distribution system that has a strong=20 appetite of MLP offerings. The visibility of NBP within their system has= =20 increased recently as their MLP analyst has raised his rating on NBP to=20 "Outperform". SSB has served as a co-manager in past NBP offerings and has= =20 performed well. Furthermore, due to their comparatively small allocations = in=20 these deals as a co-manager, we are confident that their system has=20 significant untapped demand for NBP units. Joint Lead Manager - UBS Warburg (f/k/a PaineWebber) UBS has served a lead manager for the last two NBP offerings that were=20 conducted via the rapid placement (limited marketing) process, so they are= =20 very familiar with NBP and provide very good analyst coverage. While we ar= e=20 still confident that UBS will perform well and place a large number of unit= s,=20 their allocations as lead manager in our past deals probably soaked up a=20 great deal of demand for NBP units within their system. Therefore, rather= =20 than placing UBS in a situation where they would have to stretch to put awa= y=20 a lead manager allocation, it was deemed prudent to slot them in the joint= =20 lead role. Co-Managers Dain Rauscher and A.G. Edwards Both firms have a strong mid-market presence and have demonstrated their=20 ability to place a significant number of NBP units in past offerings. Thes= e=20 firms have not participated in an NBP deal since 1997, so this offering=20 should generate strong demand. Also, Dain Rauscher was recently acquired b= y=20 Royal Bank of Canada, which provides commercial bank lending to NBP and NBP= L,=20 so NBP will be able to leverage DR=01,s participation in future debt=20 transactions. Bank of America and First Union Bank of America has been a significant provider of commercial banking=20 services to NBP and NBPL over many years, while First Union recently became= =20 an NBP lender in the March 2001 transaction. Both have retail distribution= =20 systems available which currently hold a limited number of NBP units. Both= =20 have participated in past MLP offerings, with Bank of America serving as a= =20 joint lead for highly successful Williams MLP IPO. Other institutions considered but not selected Goldman Sachs & Lehman Brothers - Both firms support the MLP product=20 reasonably well and have demonstrated adequate coverage of NBP. Their=20 systems are geared towards institutional sales and high net-worth clients, = so=20 their breadth of distribution for MLP units is more limited as compared to= =20 SSB or UBS. Merrill Lynch - Historically, this firm has not supported the MLP product= =20 despite its natural appeal to Merrill=01,s average customer. Admittedly, t= heir=20 new analyst has taken a more positive approach, but Merrill has not=20 participated in any meaningful way in several of the recent MLP offerings. MSDW - NBP receives no coverage on the investment banking side and their=20 analyst has a =01&Hold=018 rating on the units.
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