From: "Barrett, Paul S" To: jeffrey epstein <jeevacation®gmail.com> CC: "Giuffrida, David .1" Subject: To Do - NRG bonds - reiterate OW Date: Fri, 17 Feb 2012 18:52:51 +0000 Attachments: Short_Circuit.pdf Jeffrey We should buy $1mm of this bond. Ytw 7.625%. Dave Katz reiterates OW in his initiation of a high yield utility monthly. We reiterate our Overweight on NRG credit and update our NRG financial model in advance of earnings. We estimate that the company generated $384 million of EBITDA in 4Q1 I. We expect NRG will address the lower natural gas price environment and how it will impact, if at all, its timeline to refinance the 2017 notes and the company's shareholder friendly actions (i.e., dividends and share repurchases). We model a pick-up in shareholder friendly activities; this assumption may prove conservative if the company does not refinance the 2017 notes and given that NRG may flex the activities down to help guard cash. Despite these assumptions, and using the current natural gas forward price curve (NGA <CMDTY> <GO> CCRV <00>), we expect gross recourse debt leverage would increase from 4.2x to 5.3x at the end of 2013, before falling to 4.3x at the end of 2014. We believe NRG Energy is set up to survive an extended period of low power prices. Paul Barrett, CFA Managing Director Global Investment Opportunities Group JPMorgan Private Bank ue, 14th Floor, New York, NY 10022 (W) (F) NMLS ICA' 853441 This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://wwwjpmorgan.corn/pages/disclosures/email. EFTA00708817