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Monday, 3 December, 2001, 15:14 GMT
Firms admit $4bn Enron exposure
Even before Enron filed for Chapter 11 bankruptcy on Sunday, its business partners were totting up their exposure to the former energy giant.

Major exposure reported so far
JP Morgan: $900m
Citigroup: up to $800m
Credit Lyonnais: $250m
Bank of Tokyo-Mitsubishi: $248m (30.6bn yen)
Chubb Corp: $220m
Canadian Imperial Bank: $215m
Sumitomo Mitsui Banking Corp: $210m
Nikko Cordial: $207m (25.5bn yen)
Principal Financial Group: $171m
Abbey National: $164m (115m)
National Australia Bank: $104m (Aus$200m)
Duke Energy Corp: $100m
Williams Cos: less than $100m
ING: $95m
Commonwealth Bank of Australia: $78m (Aus$150m)
Dynegy: $75m
Mirant: up to $60m
ANZ: $69m
Bear Stearns: $69m
Westpac: $51m
American Electric Power: up to $50m
El Paso: up to $50m
AEP: $50m
Aquila: $50m
Sanwa Bank: $44m
Centrica: $43m
ONEOK: $40m
Mitsubishi Trust & Banking: $39m (4.8bn yen)
TotalFinaElf: $25m
Atmos Energy Corp: $13m
Dominion Resources: $11m
PPL Corp: less than $10m
Exelon: less than $10m
Northern Border Ptners: $9m
Pacific Gas & Electric Corp's National Energy Group: $8m
RWE AG: $8m
Sony Bank: $3m
Already a group of banks and trading partners have admitted to exposure of more than $4bn (2.8bn) to the stricken energy giant.

That figure could even rise as Enron's finances fall under greater scrutiny.

The list includes the firms that traded in commodity and other markets with Enron, as well as the banks that lent money to the company.

Undisclosed exposure

In addition to the many companies that have admitted to exposure to are others that are suspected of having an exposure to Enron.

For example, Royal Bank of Scotland is believed to be among Enron's creditors, but it has declined to comment on the issue.

A UK Sunday newspaper reported that the bank has an exposure of about 600m, partly secured against Enron's assets.

Sources have also said that Barclays Bank has an exposure of just under 300m, but the bank made no mention of this in a trading statement on Monday.

"If there was a material exposure and a likely loss which could be 4-5% of profit... then they would have had to put it there today," said Tom Rayner, banking analyst at Dresdner Kleinwort Benson.

Unconfirmed exposure
Royal Bank of Scotland: $855m (600m)
Aegon: $300m
Barclays Bank: less than $428m (300m)
ABN Amro: $99m
BP: about $20m

In addition, ABN Amro could be making provisions against 110m euros ($98.5m) it has lent, according to industry sources.

It could be months or even years before the true size of Enron-related liabilities is revealed, as the sheer complexity of its dealing makes it tricky for auditors to get a grasp of the situation.

US banking worries

Inevitably, the biggest exposures admitted so far come from the US banking sector.

Citigroup and JP Morgan reportedly have combined exposure of up to $1.7bn, although about half of that is secured on Enron's assets.

But India's banks have also suffered after lending to a $2.9bn power project run by Enron's 65%-owned subsidiary, Dabhol Power.

Indian banks and financial institutions, which also include state-owned Canara Bank and IFCI, have lent or guaranteed loans totalling $1.4bn to Dabhol.

International members of the lending syndicate, including ABN Amro, bring the total lent up to $3bn.

Indian banking shares fell on Monday. In afternoon trade, state-run Industrial Development Bank of India shed nearly 5%, while State Bank of India was down 2.6%.


Banks that hold Enron bonds have also been hit after they were downgraded to "junk" status last week.

More recently, Japan's Nikko Cordial, which had over $200m in Enron bonds, saw its own ratings put under threat.

On Monday, the ratings agency Standard & Poor's placed some of Nikko's ratings on creditwatch with negative implications after investors.

The ratings action came after panicked investors in funds sold by Nikko cashed in their holdings.

Overall, the collapse of Enron could cost four Japanese financial institutions that held Enron bonds about $8bn.

In addition to Nikko, these are UFJ Partners, Japan Investment Trust Management and Sumisei Global Investment Trust Management.

Trading ties

Some of this banking money may well be recovered.

Secured bond and loan creditors get high priority when a company goes bankrupt.

Less clear, however, is the situation on the energy markets, which have become hugely sophisticated in recent years, largely thanks to Enron's aggressive financial wizardry.

Enron was a market maker in a large number of countries, signing highly complicated, high value transactions many years into the future.

Although the company claims not to have defaulted on any of these deals so far, market participants are worried that it might if things become worse.

See also:

03 Dec 01 | Business
Enron opts for bankruptcy
28 Nov 01 | Business
Rise and fall of an energy giant
21 Nov 01 | Business
Crisis fears hit Enron shares
09 Nov 01 | Business
Traders wary of Enron's fate
09 Nov 01 | Business
Enron admits inflating profits
01 Nov 01 | Business
Troubles multiply at Enron
22 Oct 01 | Business
Probe sends Enron shares tumbling
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