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Enron Mail |
Bill,
I think owning the process and being the 'font of knowledge' regarding the = right and wrong application of these products is THE issue. We constantly = get the yadda, yadda..."its insured" or its "secured", or "we only have X$ = exposure" then it turns out its not. Groups like Dave Marshall's, Peter Ab= do, and the legal staff tend to be good sources of ideas and contacts, but = somehow the responsibility for the decisions seems to fall to RAC. Ironica= lly, we currently are the least capitalized to make those kinds of decision= s. Classic examples of places we do not have enough credibility are in the= history and anecdotes regarding claims made and enforced or not. Nothing = like a few war stories that are verifiable by outside sources to strengthen= our argument. While your and my instincts would probably suffice for the 8= 0% solution, this seems to be a painful road at Enron, especially when the = targets are so big. We need to arm the managers and directors in RAC with = enough information to be persuasive in steering transactions in one directi= on or another. Ted =20 -----Original Message----- From: Bradford, William S.=20 Sent: 19 September 2001 03:14 To: Murphy, Ted; Buy, Rick Subject: RE: Transactional Finance Sounds like a great idea to get together and discuss. We definitely need t= o own this process. I am not sure Marshall or the orignation team has much= understanding of the true value of this from of credit risk syndication. = We have reviewed some of these policies in the past and enforcing claims is= not as clean as cash or l/c's. Legal opinion was not very favorable in th= e past either. I am not sure how much of this we should do and what preced= ent it sets for the rest of our portfolio. If we do any it should be centr= alized on predictable credit exposures (A/R or annuities) and not volatile = MTM exposures. =20 =20 That being said, we have big targets in ugly credit markets which will requ= ire we take on some more risk. An insurance policy is better than nothing = but lets make sure McMahon understands that comparables to credit policies = for the gas and power market is not relevant when his business is clearly d= ifferent. =20 Bill =20 -----Original Message-----=20 From: Murphy, Ted=20 Sent: Tue 9/18/2001 1:07 PM=20 To: Buy, Rick; Bradford, William S.=20 Cc:=20 Subject: Transactional Finance Rick/Bill=20 The steel team (Bruce Garner et al) here is considering a credit insurance = product to support their sales into uk market. Paul Maley, who is from the= insurance world, has been part of the discussions and believes that there = is a viable product for a portion of the business. Not a fix for long-date= d mark-to-market exposure out of Russia, but probably could release some cr= edit capacity for sales to weak industry names on a delivered/unpaid basis = into first world legal environments. A bit pricey but may be less expensiv= e on a per $ basis if lots of transactions. He has been in touch with Davi= d Marshall in Global Risk Managment (Houston Insurance guy). I suggested t= hat Paul and I get together with you guys to go through in some detail. T= his is encouraging that people are working on such things, but it would be = great if we set the pace and organized the process. Speak to you tomorrow = or Thurs. Ted
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