EOL Deals with Non-performance & Payback

fyi
---------------------- Forwarded by Victor Lamadrid/HOU/ECT on 09/06/2000
06:39 PM ---------------------------

Robert Superty
09/05/2000 01:36 PM
To: Edward Terry/HOU/ECT@ECT, Victor Lamadrid/HOU/ECT@ECT, George
Smith/HOU/ECT@ECT, Patti Sullivan/HOU/ECT@ECT, Randall L Gay/HOU/ECT@ECT,
Diane H Cook/HOU/ECT@ECT, Donna Greif/HOU/ECT@ECT, Pat Clynes/Corp/Enron@ENRON
cc:
Subject: EOL Deals with Non-performance & Payback

FYI - Please make sure your teams are all aware of these procedures for EOL
deals.

Tks - Bob
---------------------- Forwarded by Robert Superty/HOU/ECT on 09/05/2000
01:25 PM ---------------------------

From: Jennifer deBoisblanc Denny
09/05/2000 11:18 AM

To: Jeffrey C Gossett/HOU/ECT@ECT, William Kelly/HOU/ECT@ECT, Kam
Keiser/HOU/ECT@ECT, Steve Venturatos/HOU/ECT@ECT, Steve Jackson/HOU/ECT@ECT
cc: Scott Mills/HOU/ECT@ECT, Elizabeth L Hernandez/HOU/ECT@ECT, Karie
Hastings/HOU/ECT@ECT, Sheri Thomas/HOU/ECT@ECT, Torrey Moorer/HOU/ECT@ECT,
Tara Sweitzer/HOU/ECT@ECT, Leslie Reeves/HOU/ECT@ECT, Robert
Superty/HOU/ECT@ECT, Bob M Hall/NA/Enron@Enron
Subject: EOL Deals with Non-performance & Payback

fyi....this is how EnronOnline deals with non-performance issues will be
handled (see below).
Please discuss with your traders/desk heads, as Bob Superty suggested, to
ensure there aren't any issues with this.
Thanks for your cooperation.
Jennifer
---------------------- Forwarded by Jennifer deBoisblanc Denny/HOU/ECT on
09/05/2000 11:08 AM ---------------------------

Robert Superty
09/01/2000 04:09 PM
To: Edward Terry/HOU/ECT@ECT, Victor Lamadrid/HOU/ECT@ECT, Patti
Sullivan/HOU/ECT@ECT, Randall L Gay/HOU/ECT@ECT, Pat Clynes/Corp/Enron@ENRON
cc: Jennifer deBoisblanc Denny/HOU/ECT@ECT, Bob M Hall/NA/Enron@Enron
Subject: Re: Sitara Deal 377626

Please read Jennifer's note below and let me know how you are currently
dealing with EOL deals that have flow outside the original range of the deal.
The way the Central desk is handling it is the way we want to across all
desks. Basically, the original Sitara deal is adjusted to add the additional
day/days that are agreed to by the traders and the counterparty to meet the
full commitment and comments need to be added to reflect the same.

Jennifer, I suggest letting all involved know that this is the way these will
be handled (traders, desk heads, risk etc.) to ensure the consistency you
mention is achieved. As you can see I'm only reaching a limited audience.

Bob Superty
---------------------- Forwarded by Robert Superty/HOU/ECT on 09/01/2000
03:25 PM ---------------------------

From: Jennifer deBoisblanc Denny
09/01/2000 03:23 PM

To: George Smith/HOU/ECT@ECT, Mark L Schrab/HOU/ECT@ECT, Robert
Superty/HOU/ECT@ECT, Bob M Hall/NA/Enron@Enron, Elizabeth L
Hernandez/HOU/ECT@ECT, Karie Hastings/HOU/ECT@ECT, Tara Sweitzer/HOU/ECT@ECT,
Sheri Thomas/HOU/ECT@ECT, Scott Mills/HOU/ECT@ECT
cc:
Subject: Re: Sitara Deal 377626

George, thanks for your explanation.

I reviewed the transaction in EnronOnline (#385131) & Sitara (#377626) and
found similar treatment in the following deals for the month of August on the
Central Desk.

Sitara # EOL#
----------- -------------
365957 363168
366026 363271
377650 385194
369869 370402

I agree with the way George & his group are handling these non-performance
and payback transactions as far as keeping them
"connected". However, I think it is beneficial to put comments in Sitara as
to what is happenning. As we know, all EnronOnline deals are FIRM. If trader
agees how to handle this on the phone, it is recorded plus it is documented
in Sitara. I think this is a good audit trail and good record-keeping.

Everyday, Elizabeth is doing a reconciliation that identifies any changes to
EnronOnline transactions. If she read the comments
documenting as above, this "alarm" would be eliminated.

Since we have not seen this on other desks, I wonder how they are handling
non-performances. I think there should consistency
in the downstream systems. Bob, can you find out how East, West, and Texas do
this?

Thanks for your help.
Jennifer

To: Jennifer deBoisblanc Denny/HOU/ECT@ECT
cc: Mark L Schrab/HOU/ECT@ECT, Robert Superty/HOU/ECT@ECT, Bob M
Hall/NA/Enron@Enron, Elizabeth L Hernandez/HOU/ECT@ECT, Karie
Hastings/HOU/ECT@ECT, Tara Sweitzer/HOU/ECT@ECT
Subject: Re: Sitara Deal 377626

These deals are not being "retraded". These are instances where the
counterparty has not performed and trading has made the decision to allow
payback.
The only way we have to schedule that payback is to add an additional day to
the deal. We could create a new ticket but I think this would create a
"disconnect" between the EOL deal and the payback deal. I would appreciate
your thoughts as to how we handle this in future.