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Enron Mail |
Last Tuesday Global Finance Europe closed a new off balance sheet facility
with Barclays creating up to $1bn of capacity for existing and new physical metals trades for Enron Metals. This transaction will be added to through an additional $350mm of capacity from Credit Lyonnais and compliments the $750mm Warrants structure completed in September. Each transaction involves a sale of either Physical Metal or Warrants to the bank with Enron receiving an associated call option. The bank hedges its market risk through a complimentary foward sale with the LME. The new physical metal facility will start receiving its first trades this week. The transaction achieves much for Enron: Deconsolidation of approximately $2bn of debt financed inventory which came with the aquisition of MG plc; The creation of new capacity to grow the business beyond its existing base; Committed facilities for the business unit which are at a lower cost than the original debt financed facilities; The creation of an additional $2.15 bn capacity in the bank markets as the facilities extinguish up to 20 lines of existing credit in the banks market; A clearer reporting and control structure for the funding of Enron Metals.; A repeatable low cost structure which meets all tax and accounting tests for applications across all our business lines Congratulations to the deal team on this great effort EGF Bill Appleby, Anne Edgley Enron Metals David Tregar; John Lunzer; Howard Carter; Clive Hutchings; William Sell Legal Justin Boyd TransSupport / Acctg Melissa Allen; Phillip Lord Tax Janine Juggins; Catharina Clabots; Angela Brown
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