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Enron Mail |
I had lunch yesterday with the Natural Resources Commodities Group from
Standard Chartered Bank as I had indicated to you earlier. I addressed with them our desire to potentially use the facility that they give us as a bridge loan in the event we were to purchase assets in the range of $75-90,000,000. Even though this is not a committed facility, I ask that they give us their assurance that this facility was not in jeopardy and that they bank was pleased with the line and line of business. They were able to give me that assurance, and in fact had planned on asking for more business at the lunch. This group is the commodities arm of the bank and the natural resources group produces over 75% of the revenue stream for the entire group. They are currently at 60% in excess of their budget for year 2000. This is important because banks generally do not cut off strong revenue generating arms. There are global issues, as they calculate exposure to us into the total exposure that they give to Enron companies ( not supported by Enron, but they look at their internal exposure in the aggregate). Standard Chartered just bought the Grindlays bank in India and of course there well be added exposure there. They plan on revising their limits to accommodate that and did not feel that this hinder our line in anyway. They also stated that in the event that the market went contango in the interim, they would entertain a short term increase over the current limits if it was needed. as a reminder the limits are: $150,000,000 in inventory financing L+ .55 - .75 $100,000,000 in account receivable sales L + .85 bear in mind however the collateral must be available in order to access these lines.
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