Project with Maria Garcia

Vince,

Here is a brief about the project with Maria Garcia.

Promigas, in partnership with others, wants to acquire $80 MM TVCable
company in Mexico.
Promigas's ownership would be 25%, i.e. , 20MM. 10MM of it would come from
debt.
Enron wants to participate this deal by offer Promigas loan guarantee in
exchange of call options
on 50% Promigas equity in TVCable.

Following suggestions have been made:

1) get a market quote for the loan guarantee;
use credit risk model to price the guarantee internally;
need to speak to Vasant

2) find a comparable company, study the volatility
using company value histogram from economics model(crystal ball output),
I can fit a lognormal
distribution, then find the volatility

3)calcalte the call option value, find braek-even strike.

Any inputs are extremely welcome.

Zimin