Today in 1997, the Portland General Electric/Enron merger was finalized and official.
It’s also an important day in the Marlin-Marlin II/Osprey/Whitewing transaction, which was part of the purchase of Wessex which later became Azurix. Marlin was a SPE that was used to issue debt backed by water assets (ie, Enron sold the assets to Marlin.) Backed by these assets, on July 1, 2001 Marlin II issued $1 billion of debt that would mature on July 1, 2003. The debt had one of Fastow’s weird little gotchas in it; if Marlin II could not pay for the debt, Enron would issue more stock to cover the difference. But the important trigger was that if that if Enron’s stock price fell below $34.13 and/or Enron’s credit rating fell below investment grade, the billion dollars would be due immediately. This would later set the company on it’s final death spiral.
