Moody's joins S&P in downgrading Enron (ENE, DYN) by Tomi Kilgore
Moody's Investors Service downgraded Enron's (ENE) senior unsecured debt to "B2" from "Baa3." The debt rating
service also confirmed its "not-prime" rating on Enron's commercial paper, and left the company's long-term debt under review for a downgrade. "The continued decline in Enron's financial performance including significant consumption of cash in its operations, in part due to counter-party demands for cash margin, has diminished prospects for the completion of Enron's proposed merger with Dynegy," Moody's said. "Furthermore, lack of confidence in Enron by its trading counter-parties appears to be adversely affecting Enron's core trading operations." The firm added that Enron's core energy trading operation must sustain profitable trading volumes if the company were remain a viable acquisition candidate (see 12:28 item). Enron (ENE) and Dynegy (DYN) shares are currently halted for trading (see 12:44 item).