RE: Cash Collateral

Yes!!! We are facing more margin requirements in Canada and need to increase
our flexibility in acceptable forms of margin.

-----Original Message-----
From: Keohane, Peter
Sent: Monday, April 02, 2001 7:02 PM
To: Taylor, Mark; Shackleton, Sara; Hendry, Brent; Cook, Mary; St Clair,
Carol; Jones, Tana; William S Bradford/HOU/ECT@ENRON; Russell
Diamond/HOU/ECT@ENRON; Tanya Rohauer/HOU/ECT@ENRON
Cc: Johnston, Greg; Powell, Mark; Gaffney, Chris
Subject: Cash Collateral

Greg Johnston may have a solution to the limitation on Canadian cash
collateral. Without getting into detail, a security interest in an
"instrument" can be perfected by possession under the Personal Property
Security Act, and an "instrument" includes a bank draft. If counterparties
were to provide bank drafts on the same terms as they provide LCs we could
rely on perfection by possession. Is this something we should investigate
further? Peter.