ISDA PRESS REPORT - DECEMBER 26, 2001 CREDIT DERIVATIVES ISDA publishes credit survey - Risk ENERGY Enron's Success Story - The Wall Street Journal The International Swaps and Derivatives Association released its first survey of the global over-the-counter credit derivatives market last month, showing a total notional outstanding volume of credit derivative transactions of $631.5 billion as of the end of the first half of this year. ISDA, which compiled information from 83 firms, hopes the survey will provide a benchmark from which to chart future growth in the credit derivatives market. This survey, and the others that have been done by Risk, the British Bankers' Association (BBA), the US Office of the Comptroller of the Currency (0CC) and the Bank for International Settlements (BIS) have all used different methodologies on different samples, and have generated varying results. Risk's survey last year showed significantly higher total notional volumes $810 billion. The BBA survey released in July 2000 also gave a higher figure, forecasting $893 billion for the end of 2000. The BJS plans to publish its triennial figures on the credit derivatives market later this year. Upward trend According to ISDA, while still modest in relation to interest rate products, the credit derivatives market is expected to remain on a strong upward trend compared to more mature derivatives product areas. Most major dealers say there has been a big increase in their credit derivatives volumes. Mike Brosnan, deputy comptroller of risk evaluation at the 0CC, pointed to a challenge in assembling these surveys: "When you conduct a survey, some people may or may not respond, hence the data could be incomplete. A problem with a survey is: who is the enforcer?' The OCC. which carries out its own quarterly review of the US derivatives market, showed a decline in the credit derivatives market, from $426 billion at the end of 2000 to $351 billion at the end of second-quarter 2001. Brosnan attributes the decline in the credit derivatives market to uncertainty among users, relating to restructuring issues sparked off by the US life insurer Conseco's debt restructuring last year. However, according to Tim Frost, head of JP Morgan's credit derivatives business in London, the decline evidenced in the OCC's figures really comes down to a change in reporting methods that occurred in 2000 from gross-to-net notional figures on outstanding credit derivatives contracts. Enron's Success Story The Wall Street Journal - December 26, 2001 The collapse of Enron was many things -- a gratifying slap in the face to
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answer: ISDA PRESS REPORT - DECEMBER 26, 2001
Anne, I have reviewed the P&S Agreement for Triple Lutz. From my perspective, it generally looks fine. I have a few comments, and invite Pat Mackin to add any he may have, in particular based on his review of Section 4.14. In Section 4.7(c)(iv), there is a reference to any contract obligations. I believe this would include employment contracts, which do not appear to be identified specifically on any schedule unless the annual amount exceeds $250K. We may want to clarify that the disclosures are consistent with the provisions of Section 4.13(iii). Section 4.8 provides that we will not enter into any employee benefits not required by law. However, given that closing is pushed out so far in the future, we may want the flexibility to provide incentive bonuses for key personnel to stay with the company through closing. This may be done with the Buyer's consent, but we may be tying our hands. Section 6.2(e) contains a similar restriction on making payments to officers/directors. In addition, Section 4.8 states that we won't enter into or amend any employment contracts. We do not renew employment contracts at a single time, and the contracts of key personnel may expire. Do we want to tie our hands and be prohibited from amending/extending the agreements? Section 6.2(l) also prohibits the modification/amendment of contracts with employees. In Section 4.10, the wording "(other than Environmental Laws)" suggests that we are not in compliance with environmental laws. Rephrasing that sentence to refer to the provision of the Agreement may be preferable. In Section 4.11(d), we promise that we haven't provided any gift of any kind to customers. I don't think we can say that, given that we regularly host client development outings (e.g. Rodeo BBQ tickets, golf tourneys, etc.) and provide Enron goodies to people all the time. Perhaps a limitation on de minimus gifts would be more accurate. Also, a reference to our Code of Ethics may work here. In Section 4.13(a)(iii), does the $250K threshhold include only cash value, or does it include equity grants that vest over time? A reference to "cash" payments would clarify, given that people here are compensated by stock options/restricted stock that vest over time. In Section 4.14(d), I am not sure whether this transaction accelerates vesting -- Pat, do you know?
Answer: Comments to P&S Agreement -- Triple Lutz
Here is an email: Mark, Sara and Mary: Jim would like to talk to someone about problems he is having with his customers concerning the ISDA and CSA forms. Apparently, most of his customers feel that it is too complicated and Jim would like to see if any alternatives exist. Could someone please contact him? Thanks.
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A: Pulp/Paper
Q: Hi Carlos, I should be easy to reach on my cell until around 930 Tuesday. Feel free to call. In my absence you can feel comfortable talking to Jeff. He seems pretty reasonable and easy to talk to. Plus, he knows a lot about Enron stuff. You will want to discuss the risk memo with him, copying Sheila I guess. Ask Jeff. Like I said before, I'll back you up on whatever decisions you make, for whatever that's worth. My folks number (just in case you lost it) is 817 292 3367. Ciao, Kay
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IN: During the weekend of October 6 and 7, 2001 the Enterprise Storage Team will be migrating all production users off the current hardware (Solar) that houses their home and application directories (no production databases are affected, but client software will be) to new hardware. This migration requires a total system outage of approximately 6 hours. The outage will occur Saturday night - beginning at 7:00 PM and will last until Sunday morning at 1:00 AM. All users will need to be logged off during this time period. In order to validate the migration, production users need to test access to their home directories and applications on Sunday, October 7, 2001. If you do you experience any difficulties after the migration with access to home directories or applications, please call the resolution center at 713 853-1411. The resolution center will notify the appropriate resources. The following attachment is a list of the mount points affected. Bob Ambrocik Enterprise Storage Team EB 3429F x5-4577 bob.ambrocik@enron.com

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OUT: Solar Migration - Third Notice - Time Change!!!!!
IN: This is an email
This company has requested a Master Agreement? I thought there were some issues regarding their credit. Please let me know if we can do a Master and it so, please send a credit sheet asap. Thanks

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OUT:
Constellation Power Source