IN: This is an email
John, Attached is the Transco guaranty with further revisions. The following items of note were revised. 1. Transco added language stating that this is a performance guaranty. Enron will only provide a payment guaranty. Enron does not have the means to ensure performance by the LLC. Thus the language needs to clearly identify that this is a payment guaranty. As long as Transco gets paid for the transport, I am not sure why this matters. 2. Transco would be able to collect interest for late payments under their tariff. Putting late payment interest in the guaranty would give Transco the ability to recover double interest on late payments. Thus, the interest language in the guaranty was removed. Please review the revised guaranty. I would be happy to discuss these issues with Transco's attorney's at their convenience. Let me know if you have any questions. Thanks.

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OUT: Transco Guaranty
QUESTION: Attached is a revised Credit Watch listing for the week of 6/11/01. Please note that United States Gypsum Company was added to "No Trades" and Proliance Energy is now at "ENA Purchases Only". If there are any personnel in your group that were not included in this distribution, please insure that they receive a copy of this report. To add additional people to this distribution, or if this report has been sent to you in error, please contact Veronica Espinoza at x6-6002. For other questions, please contact Jason R. Williams at x5-3923, Russell Diamond at x5-7095, or Veronica Espinoza at x6-6002.
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ANS: Credit Watch List--Week of 6/11/01
Here are my notes from today's call. As with Monday, I've focused on getting them out as quickly as possible rather than taking extra time to re-organize them by subject. Enron's business has been grouped into three buckets: Core, Non-core, and Under Review. Core: Wholesale energy business in North America and Europe, retail energy, pipelines Non-core: Broadband, water, and international assets (i.e. EGAS). Enron has approx. $8Bn in investments in these assets, and they have produced 'dismal' returns. Enron will be exiting these businesses and will attempt to wind them up in an orderly fashion. An aggressive divestiture program has been set in motion for these assets. Under Review: EGM, EIM. These businesses are being closely examined to determine whether they have a reasonable chance of long-term viability. Required resource levels are being carefully studied. Following review, Enron will move the different portions of these businesses to core or non-core as the analysis dictates. Approximately $800MM of asset sales are under contract and expected to close in the fourth quarter. These include a gas LDC in Brazil, EcoElectrica, and our Indian E&P assets. Enron is in active pursuit of an additional private equity infusion of $500MM-1Bn. Given the current environment, raising equity in the public markets would be 'inefficient', McMahon says. Short-term liquidity is provided by the $3Bn of credit drawn upon a few weeks ago, the $1Bn of new debt, and the $1.5Bn equity infusion from Dynegy. Longer-term, the proceeds from the sale of PGE will provide liquidity. Asset sales over the next year will be used to pay down debt. McMahon described the major off-balance-sheet vehicles: Marlin was set up to hold Azurix assets. It was initially capitalized with $950MM of 144a debt and $125MM of equity (raised from Enron and institutional investors). The debt is supported by the equity and by Azurix' assets. Enron is obligated to cover any deficit at the time the debt becomes due on 3/17/03 (the 'Enron topup' obligation). The 3/17/03 date is accelerated in the event that Enron is rated below-investment-grade by any one of the three major agencies. The primary asset of Marlin is Wessex Water. As long as Wessex is worth at least $2.6Bn, there will be no Enron topup required. If we take a 25% haircut to present book value, Enron will have to provide $650MM in consideration upon retirement of the debt. This $650MM would hit Enron cash, income, and equity balances. Osprey contains energy-related assets and 'other assets'. It was initially capitalized with $2.4Bn of 144a debt and $220MM in equity (ENE and institutionals). As with Marlin, the entity is an asset-backed structure with an Enron topup guarantee. The debt is supported by a) the assets; b) $1Bn of convertible preferred ENE (convertible into 50MM shares of ENE common); and c) additional ENE common as needed for topup. Assuming the same 25% hypothetical haircut to current book value, Enron would have to deliver approx. $600MM of topup funds--which would hit ENE cash, income, and equity. The debt must be retired by 9/17/02, with the same cut-to-junk early trigger provision as Marlin.
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answer: Highlights from ENE Analyst Conference Call 11/14
The attached report summarizes current significant legal activities of EWS Legal as of February 15, 2001. This report does not attempt to list all transactions or include reference to on-going maintenance of completed transactions. Please let me know if you have questions.
Answer: Enron Wholesale Services Legal Department Monthly Report
Here is an email: Kenneth L. Lay ENRON Rod Canion, Rob Shaw, John Lee and other movers and shakers in town call on Brookwoods to develop their Talking Points and PowerPoints. They use these speeches and presentations to deliver critical business messages to investors, analysts, media and key industry partners. How does your message sound? How does it look? Does it deliver the results you want? If you answered NO or I AM NOT SURE to any question, have your administrative assistant call me in for a brief confidential review and assessment. Charlie Beck
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A: THE RESULTS ARE IN
QUESTION: Tanya: There's no short answer with these people! I think we are fine with their setoff language (part A only) because the NDP always has the option to permit setoff to other agreements between the parties as to amounts payable by the Payee to the Payer (where the Payer owes money under the ISDA to the Payee). So here's my recommendation: (1) Call your friend Andre and hear what he has to say. He has some kind of suggestion about Part (B) and limiting the NDP's payment to the DP to be based upon satisfaction that "nondisputed" amounts having been paid by the DP. Will he also raise the "other agreements" issue here? Not a clue. (2) If Cargill leaves part A in tact and we agree to change part B, I'M FINE. (I'm fine without part B, actually) (3) The potential problem is that Cargill and ENA view part A differently, right off the bat. I think Cargill is wrong because they don't read part A as applying to "other agreements between the parties". But Cargill proposed part A and it DOES apply to "other agreememts between the parties." I don't want to start off on the wrong foot so I'm sure I'll have to discuss this again with Marty. Thanks for your continued help. Sara
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ANS:
Cargill, Incorporated - the final SETOFF discussion