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Enron's fund exposure
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November 29, 2001: 1:50 p.m. ET
Mutual fund investors may have unknowingly ridden the stock down.
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NEW YORK (CNN/Money) - Enron's fall from Wall Street's graces is obviously troubling for investors who rode the stock down from its high of about $90, but some investors holding mutual funds may not realize their exposure to the company's collapse.
Although 70 percent of Enron's shares were held by institutional investors as of Sept. 30, this is spread throughout more than 1,000 funds.
The five largest mutual funds holding Enron as of Sept. 30 were Alliance Premier Growth A, Janus Fund, Janus Twenty, Janus Mercury, and Vanguard 500, according to Thompson Financial.
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Deborah Marchini takes a look at what mutual funds have positions in Enron.
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Of the institutional holders, Alliance Capital held the most as of Sept. 30, with 43 million shares, or almost 5.8 percent of Enron's outstanding float. An Alliance representative was unavailable to update the figures.
Janus, 90 percent owned by Stillwell Financial (SV: down $0.16 to $23.80, Research, Estimates), held the second most Enron shares, with 41.4 million. A Janus spokeswoman told CNN/Money the firm has been the largest seller of Enron since Sept. 30 and no longer owns the stock.
Putnam Investments, a unit of insurer Marsh & McLennan (MMC: up $1.30 to $108.44, Research, Estimates), held the third most Enron shares for an institution, with 23.1 million. A company spokeswoman would not comment on recent Enron transactions.
Barclays Capital held 23 million shares as of Sept. 30, and a company spokesman said that figure is the latest available. He did add that Barclays manages many pension funds based on indexes which used to include Enron, like the S&P 500.
Fidelity Investments held 20.8 million shares as of Sept. 30 and a spokesman did not comment on any recent transactions with Enron shares.
Exposure to Enron debt
Pension and mutual funds holding Enron's debt also face some concerns. Funds are largely barred from owning debt with "junk" status, and when Standard & Poor's downgraded the energy trading firm's debt Wednesday, it put them in a precarious position.
When Dynegy backed out of its $9 billion purchase of Enron, the company's debt fell to 20 cents on the dollar, and the question now becomes when the funds will have to sell the debt and what kind of losses they will sustain.
Among the largest funds holding of Enron debt are First Focus Short/Intermediate Bond fund, WesMark Bond, ARK Short-Term Bond, LKCM Fixed-Income, and Citizens Income.
Falling below an investment grade rating also triggers a covenant with institutional lenders, stipulating that Enron must repay the debt upon the downgrade, offer assets as collateral, or refinance the debt.
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In the best case scenario, Enron will emerge with higher borrowing costs.
In the worst case, the company will not be able to do anything but go into bankruptcy and restructure its old debt, meaning some lenders holding older debt will lose out completely.
Enron employees are also feeling the pain of the company's collapse, as two-thirds of the company's 401(k) plan comprises Enron (ENE: Research, Estimates) stock. 
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