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Enron Mail |
Thanks for the input. I'll see what we can figure out.
Herman Manis 08/16/2000 03:36 PM To: Kay Mann/Corp/Enron@Enron cc: Lisa Bills/Corp/Enron@ENRON, David Leboe/HOU/ECT@ECT Subject: Re: VEPCO The current structure (including VEPCO in Cornhusker under our Fair Value Model) does not contemplate credit support. There currently is not credit support of the actual project co (Ponderosa Pine) under the Cornhusker structure. ENA typically does not provide credit support of project co's under the fair value model because of certain bright line tests under the fair value model for an asset purchase to qualify for fair value. From a bank financing and economic perspective, ENA has a total return swap with Delta Power, the 100% owner of Ponderosa Pine (Ponderosa Pine is bankruptcy remote). There possibly could be credit support from ENA for the project co if we were compensated a fair value fee for the support, but this issue has never been tested with AALLP (would need third party fairness opinion). In the end, there could only be a form of financial support, not a performance guarantee. To: Herman Manis/Corp/Enron@ENRON, Lisa Bills/Corp/Enron@ENRON cc: Ozzie Pagan/HOU/ECT@ECT, Heather Kroll/HOU/ECT@ECT, Jeffrey Keenan/HOU/ECT@ECT Subject: VEPCO Virginia Power has raised a question about wanting some type of guaranty or other form of performance security should an Enron LLC sign the contract. What can we propose (or exclude) under the contemplated structure? Thanks, Kay
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