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Nuclear Spin

Entergy’s $20 billion spin-off plan elicits yawns on Wall Street

Fortnightly Magazine - January 2008

Entergy Corp.’s announced plan to spin off about 5,000 MW of nuclear assets generated a major buzz when it was announced in early November.

Early analysis suggested the transaction might have a positive effect on Entergy’s credit rating—given the relatively high market-risk exposure of the Nuclear Spinco assets, compared to Entergy’s corporate profile. And of course Entergy hopes a pure-play nuclear generator will fetch a big premium in the carbon-spooked equities market.

But the Nuclear Spinco buzz weakened as credit worries on Wall Street dampened enthusiasm about large or unusual transactions, and doubts emerged about relicensing at Entergy’s Indian Point plant in New York.

The buzz might strengthen again, however, as the credit and regulatory picture gets clearer, and Entergy moves forward with its nuclear spinoff.

New for 2008

With this issue, Fortnightly introduces the all-new “Transactions” department. This snapshot of developing deals provides a street-level view of the industry, plus perspectives on trends and transactions. Later this year, “Transactions” will become an interactive database on Fortnightly.com, with details about more deals. Readers are invited to email relevant details to fortnightly@pur.com.