Susan: I wanted to clarify whether Enron Australia Pty. Ltd. needs to execute ISDA Master Agreements with the SAME counterparties which already have agreements with ENA (and vice versa). As an example, I can only rely upon tax advice ENA has previously received in connection with the services agreement between ENA and ECT Canada. For book and tax purposes, the trade is recorded on the risk books of the Enron affilate ultimately booking the trade but the transaction is actually documented in the name of the Enron affiliate having the Master Agreement with the counterpary. The Enron affiliate having the Master Agreement with the counterparty then transacts with Risk Management & Trading Corp. (through a bulk swap arrangement). The credit risk remains with Risk Management & Trading Corp. (through an internal back to back transaction with the "booking" Enron affiliate) for which the "booking" Enron affiliate will presumably pay a fee pursuant to the services agreement. Consider: ENA is negotiating an agreement with Commonwealth Bank of Australia. Will Enron Australia require a separate master with Commonwealth Bank of Australia? Or will the services agreement permit the hereinabove described arrangement?
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Financial Trading - Enron affiliates