Relative to CNP, CER is in a better position. I appreciate this...

Relative to CNP, CER is in a better position. I appreciate this is a topic of some debate, but I am still sticking with the belief that the market has got CER very wrong.

CER probably won't need to do a D2E swap and I am reasonably sure this was discussed at the AGM.

When considered as a stand-alone entity, the issues facing CER relate almost entirely to the association with CNP

a) The derivatives and hedging with CNP as counterparty

b) The fact that CNP has a controlling interest and can thus influence the CER entity in a way that might conflict with minority shareholders

c) The SuperLLC joint venture

Point a is difficult to quantify, point b just needs to be sorted out and the board have acknowledged this, point c is ring-fenced which means the CER loss associated with a SuperLLC collapse is limited.

Long term CER is probably going to be fine if it can overcome the leverage issues and ride out the downturn. Short term though it will be rewarded and punished in lock-step with the market view of CNP.