Analysts Note Changes In Term-lengths Of New Gas, Power Contracts Due To Financial Crisis

摘要

The financial crunch and stiffer credit requirements have made traders more cautious about over-the-counter swaps and forced retail natural gas and power marketers to offer shorter-term deals to customers, financial consultants said last week.rn"Belief in the full faith and credit of your counter party is an important part [of] entering into a contract-based deal," said Kevin Book, chief energy analyst with Friedman, Billings, Ramsey Capital Markets. "You may have a contract behind you but if the other guy doesn't pay, you lose money," he said.rnWhen Lehman Brothers went belly-up in September, "a number of securities that were being traded were effected," he explained. That made "some folks cautious about OTC swaps, particularly in extreme cases where [either party] might be tight on cash," he continued.rnWhen it comes to bilateral power contracts, marketers in states with retail competition tend to offer fixed-price, long-term deals of more than one year on a regular basis for customers that want to avoid the volatility associated with commodity prices.