Re: Prepay deals

Li,

I will get with Errol and see what we can pull together. I will get back
with you when I get a better indication on how long this process will take.

I will also try and include Errol's counterpart in Crude to help with those
prepays.

Eric

Li Sun
01/18/2001 04:38 PM
To: Eric Boyt/Corp/Enron@Enron
cc:

Subject: Prepay deals

Hi, Eric,

This is Li Sun from Research Group, it was my pleasure meeting you yesterday.
Since we basically went through Chase deal structure, but deal structure
varies from each other. Just as Eric Moon said, one deal with Cage is gone
now. I have the whole list of prepays which I gave it to you yesterday, could
you explain to me the basic structure of each? For example, for the Chase
deal, the net exposure of ENA is cash inflow of $300MM upfront and cash
outflow of fixed $4 times fixed quantity of gas over time. In this deal, our
commodity position is perfectly hedged, in other words, Enron is not exposed
to commodity price risk. The only risk I can think of is credit risk from the
third party. Will you please have the similar chart for each prepay deal?
That will be very very helpful for me to understand what is Enron's exposure.

Kevin and I talked to Errol who is keeping risk book today, unfortunately he
doesn't know much about the structure of each deal. I will really appreciate
if you could provide me some hint.

Thanks a lot!

Li