Enron & Affiliate Ratings Unchanged By Fitch Following Bankruptcy Plan Filing.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 16, 2003

Ratings and the Rating Outlook for Enron Corp. (ENE) and its affiliated companies have not been changed by Fitch Ratings following the filing by ENE of its Chapter 11 bankruptcy plan (the Plan) on July 11, 2003.

ENE's 'D' rating status reflects modest recoveries (initially estimated by Fitch within the 20%-40% bracket, and now expected to be at the lower end of this range) and ENE's rating is not expected to change throughout conclusion of the bankruptcy process. Under the Plan, ENE unsecured creditors will receive 14.4% of par value and subordinated debt and preferred stock will have $nil recovery. Recoveries vary for debtors of those other individual ENE affiliates which have been placed under Chapter 11 protection, reflecting the bias towards individual asset cover analysis within the Plan, though aggregate recoveries on the debts of those entities in Chapter 11 looks to average roughly 20% should the Plan's estimates prove accurate.

ENE affiliates, Northern Border Partners, L.P. (NBP), Northern Border Pipeline Company (NBPL), Portland General Electric Co. (PGE), and Transwestern Pipeline Co. (Transwestern) have been negatively affected by ENE's bankruptcy status to varying degrees. Execution of the Plan as proposed and the separation of the affiliates on a timely basis would be favorable credit developments. However, the full credit implications of the Plan have not yet been determined and Fitch will conduct a fuller analysis of the Plan and underlying assumptions before taking rating action. Furthermore, delays due to litigation cannot be ruled out given the scope and complexity of the bankruptcy estate.

The Plan, which has the support of ENE's independent creditors' committee and certain other significant creditors, is premised on compromise and settlement between the several parties to the bankruptcy in an effort to avoid costly litigation. As proposed, distributions to creditors under the Plan will be based on assumptions as to the relative likelihood of substantive consolidation of the plan debtors. ENE unsecured creditors will receive the sum of 30% of the distribution the creditors would have received if the debtors were substantively consolidated and 70% of the distribution the creditors would have received if the debtors were not substantively consolidated.

In addition, distributions to creditors will be derived from a common pool consisting of a mixture of cash and the stock of newly formed subsidiaries, CrossCountry Energy Corp. (CrossCountry) and InternationalCo., as well, potentially, as that of PGE. CrossCountry will be a holding company for ENE's natural gas pipeline businesses; its principal assets being Transwestern, a 50% ownership in Citrus Corp., and a general partnership interest in NBP.

InternationalCo. will hold ENE's international infrastructure assets. The current expectation is that cash will compose two-thirds of the distribution for most creditors, with stock in the new subsidiaries forming the remaining third. Details of the subsidiary valuations implicit in these calculations are not available at this time, but represent an area where recoveries may rise or fall materially relative to currently published expectations. Distributions of cash or stock to creditors will not begin until confirmation of the Plan by the bankruptcy court.

NBP, NBPL, and Transwestern

Under a motion filed with the bankruptcy court on June 24, 2003 relating to the formation of CrossCountry, it is contemplated that the ownership interests of ENE's domestic pipeline operations including NBP, NBPL, and Transwestern will be contributed to CrossCountry for eventual distribution to ENE creditors. The transfer to CrossCountry will require court approval and is expected to happen during the third quarter of 2003. It is also contemplated that entities owned by CrossCountry will be indemnified by ENE for tax, employee benefits, and certain other liabilities, removing some investor concern. In particular, the ownership of Transwestern by CrossCountry is expected to facilitate efforts by Transwestern to renew or replace its existing $500 million 364-day secured credit facility that matures in November 2003. Fitch will review each of the affected companies' ratings pending further analysis of the implications of the formation of CrossCountry and distribution of CrossCountry shares.

PGE

PGE's ratings reflect the ongoing challenges arising from its status as a subsidiary of an insolvent parent, ENE. As outlined in prior Fitch commentary on PGE's ratings (including the most recent press release, 'Fitch Ratings Upgrades PGE's Sr Secured Debt to 'BBB-'; Rating Outlook Positive', dated June 4, 2003 and available on the Fitch Ratings web site at 'www.fitchratings.com'), PGE's standalone financial characteristics would support higher ratings absent the linkage to ENE. Nonetheless, Fitch has also recognized the significant improvement in PGE's liquidity in light of refinancing activities in 2002 and earlier this year. The current Positive Rating Outlook assigned to PGE reflects potential for further positive rating action in the near to medium term. Fitch has previously identified key drivers for further rating action as including a reasonable outcome in the pending FERC investigation into PGE's role in the alleged manipulation of western energy markets and the emergence of greater clarity within ENE's bankruptcy process. Progress toward the ultimate approval and implementation of the proposed plan of reorganization, or lack thereof, should become evident over the next several months as administrative proceedings unfold, providing guidance with regard to the latter issue. ENE's board has also indicated that it is still in the process of determining definitively whether to sell PGE prior to a restructuring or distribute the PGE stock as part of the Plan, as outlined above. Should PGE be the subject of an acquisition, the ratings would again become subject to more immediate review based on the plan of acquisition financing that would then apply.

Enron Corp. affiliate ratings listed below:

NBP

-- Senior unsecured debt 'BBB+';

-- Rating Outlook Negative.

NBPL

-- Senior unsecured debt 'A-';

-- Rating Outlook Negative.

PGE

-- Senior secured debt 'BBB-';

-- Senior unsecured debt 'BB';

-- Preferred Stock 'B+';

-- Rating Outlook Positive.

Transwestern

-- Senior unsecured debt 'B+' (indicative);

-- Rating Watch Evolving.