Fitch says Enron, affiliates unchanged

Fitch Ratings said the ratings on Enron Corp. and its affiliates are unchanged including Enron's D rating, Northern Border Partners, LP's senior unsecured debt at BBB+ with a negative outlook, Northern Border Pipeline Co.'s senior unsecured debt at A- with a negative outlook, Portland General Electric Co.'s senior secured debt at BBB-, senior unsecured debt at BB and preferred stock at B+ with a positive outlook and Transwestern Pipeline Co.'s senior unsecured debt at B+ on Rating Watch Evolving. The comments come after Enron filed its reorganization plan.

Fitch said Enron's D rating reflects modest recoveries, initially estimated by Fitch in 20%-40% bracket and now expected to be at the lower end of this range. Under the reorganization plan, Enron unsecured creditors will receive 14.4% of par value and subordinated debt and preferred stock will have nil recovery. For the debt of affiliates, recovery will be roughly 20% on average.

Northern Border Partners, Northern Border Pipeline, Portland General Electric and Transwestern Pipeline have been negatively affected by the bankruptcy to varying degrees. Execution of the plan as proposed and the separation of the affiliates on a timely basis would be favorable credit developments, Fitch said. However, the full credit implications of the plan have not yet been determined and Fitch will conduct a fuller analysis of the plan and underlying assumptions before taking rating action.

Furthermore, delays due to litigation cannot be ruled out given the scope and complexity of the bankruptcy estate.

The plan is premised on compromise and settlement between the several parties to the bankruptcy in an effort to avoid costly litigation. As proposed, distributions will be based on assumptions as to the relative likelihood of substantive consolidation of the plan debtors. Enron unsecured creditors will receive the sum of 30% of the distribution the creditors would have received if the debtors were substantively consolidated and 70% of the distribution the creditors would have received if the debtors were not substantively consolidated.

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