Trading Desks Pick Up Enron's Flagstaff

Deutsche Bank and Bear Stearns split a $72 million piece of Enron Corp.'s Flagstaff bank debt sold by an original lender this month.

  • 15 Apr 2005
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Deutsche Bank and Bear Stearns split a $72 million piece of Enron Corp.'s Flagstaff bank debt sold by an original lender this month. "The upside is low-to-mid 40's. The paper traded in the high 38s," one trader said. "The Flagstaff claims have not been approved by the court. They are still negotiating what Flagstaff creditors will get and people are probably buying it cheap," he speculated.

Mizuho Corporate Bank is said to have sold a position of a similar size last month as the claims may have more value than lenders originally thought. Officials at Deutsche Bank and Bear Stearns declined comment.

Flagstaff was an entity created in 2001 by Enron that refinanced $375 million of debt associated with the acquisition of Canadian pulp and paper mill Stadacona. J.P. Morgan structured the transaction to obtain advantageous tax relief under Canadian law. Flagstaff was highly complex and also included an intraday loan of $1 billion provided by J.P. Morgan to Flagstaff. Credit support for the loan was then provided by Enron through a total return swap.

Mizuho, Bank of Tokyo-Mitsubishi, The Royal Bank of Scotland, National Westminster Bank, Ulster Bank Ireland, Mitsubishi Trust and Banking Corp. and Banco Bilbao Vizcaya Argentaria, originally held claims related to the Flagstaff transactions.

  • 15 Apr 2005

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

Bookrunners of Global Structured Finance

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1 Citi 83,931.01 244 12.94%
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3 Wells Fargo Securities 64,351.96 203 9.92%
4 JPMorgan 46,391.25 147 7.15%
5 Credit Suisse 37,323.31 115 5.75%