RE: Accounting Concern

Terry -

Excellent point. Obviously, not marking these contracts opens up a can of worms. I guess neither Anderson nor RAC had an issue with marking these deals initially. Do the non LD termination provisions definitely negate our ability to mark or is the call discretionary?

RH

-----Original Message-----
From: Donovan, Terry W.
Sent: Wednesday, October 10, 2001 1:48 PM
To: Black, Don; Herndon, Rogers
Subject: Accounting Concern

The following concern has arisen: Many of the contracts we have discussed have non-market based LDs that may impact our ability to mark the value. Tyco is a good example - The contract has site specific termination amounts that are unrelated to our MTM values.

Many deals appear to have similar problems - I would like your opinions on this. Specifically do we want to force the issue and only mark in accordance with the contractual language.

Please let me know your thoughts as soon as possible.