wsj article, page-10

dc1,

That is probably the assumption Kris is making and it would be based on some of the indications the company has already made.

We are probably looking at the issuance of preference shares which pay a coupon rate of interest, in theory less than the rate CNP is currently paying on the debt or at the very least deferred until a point in the future. These shares will pay interest up until a future date when there will probably be an option to convert the pref shares into ordinary shares, like the ones we all hold today. This helps defer some of the interest burden but also allows the lenders to convert to common shares once the company has recovered. It also puts them in the same boat as us - to want the company to survive and the ordinary share price to rise so they can cash-out with a big profit.

The preference shares would rank above the common shares that we all currently hold in the event of a liquidation.

You may remember that Warren Buffet took pref shares in Goldmans and GE earlier in the year in return for injecting some much needed capital. He squeezed a huge interest rate out of the deals. CNP would need to either be done at a much lower rate or have the rate deferred until we get back on our feet again.

There are numerous ways D2E can be executed so this illustrates just one of them.

If CNP can pull a deal like this off and swap, say, $1 to 2 billion of debt for preference shares that don't dilute us too much and a long-term extension on the remainder, it would be a huge outcome.