TY - JOUR T1 - Merchant Energy Road to Recovery JF - The Journal of Structured Finance SP - 14 LP - 19 DO - 10.3905/jsf.2003.320315 VL - 9 IS - 3 AU - Todd Filsinger AU - Mike Hormell Y1 - 2003/10/31 UR - https://pm-research.com/content/9/3/14.abstract N2 - Over the past year, energy merchant restructurings and bankruptcies have signaled that the sector has entered the bottom of a business cycle. The questions any current or potential investor in energy assets should ask are: “What are the factors driving the current energy market depression?” and “What are the factors that will affect the timing of market recovery?” For the energy company in distress, the road to financial solvency must consider three main concepts: portfolio composition, regional market exposure, and capital structure. This article addresses the effect of regional market exposure on a portfolio's performance in this downward business cycle. The important regional market characteristics are reserve margin, fuel on the margin, and spark spreads. Other possible complications outside these fundamentals that could change the way the market recovers include a slowing down of project cancellations and postponements, a continuing credit crunch, and tightening government environmental policies. ER -