Deutsche Bank won the bid for $108 million of Enron Corp. trade claims auctioned off by Reliant Energy in a painfully close bidding situation. The winning bid came in the 27 3/4-28 context and the cover bid was said to be only $50,000 less. The runner-up could not be determined by press time and Deutsche Bank officials declined comment.
"The seller was being aggressive, trying to get the bid as high as it could be," one trader noted. "They are liquidating now instead of waiting for a couple of years and losing money", another trader said, speculating on Reliant´s motivation to sell. "If you sell, you are gone." Questions for Lloyd Winnington, Reliant's treasurer, were referred to a spokeswoman who did not return calls.
Additionally, the talk in the market is that $200 million in trade claims from an Enron subsidiary are slated to be auctioned off next week. The claims could hold a $200 million corporate guarantee by the parent company, market participants said. At the time the money was loaned, $200 million from the Enron parent could have provided a corporate guarantee for the $200 million of an original Enron entity loan, a trader explained. However, creditors would only have a claim against either the parent or the subsidiary, he noted. The identity of the seller could not be determined. Calls to Enron officials were not returned.