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Enron Mail |
Elizabeth and Bill - As you are aware the NSTAR transaction has been split
into a one year deal with a potential long term (3 year) deal to follow as NSTAR felt the structure of the long term deal was complex and would require certain regulatory approvals (which had long lead time and were potentially difficult to obtain). The one year deal will not require such approvals and will be structured like the current 6-month deal with which NSTAR is comfortable. This structure eliminates certain issues including the physical/financial netting issue. This is because the financial swap and put is eliminated and in its place is simply a fixed energy offset amount which reduces the volumes Enron is required to deliver. The short term structure was set up whereby EPMI would be obligated to supply each of the NSTAR operating subs (Boston Edison, Cambridge, and Commonwealth) under one agreement. There are embedded cross defaults in the agreement (e.g. a ratings drop by any NSTAR sub results in a MAC). However, the agreement also included a provision that each of the NSTAR subs is severally but not jointly liable. Thus, in a NSTAR default termination scenario EPMI would likely need to stream volumes and calculate 3 separate termination payments and subsequently pursue each sub separately notwithstanding the obligation to pay the termination payment is set up as a collective obligation of the NSTAR subs. Unlike the 6-month deal, the attached draft provides that NSTAR is obligated to deliver a parent guarantee. This was resisted by NSTAR on the short term deal as each of the NSTAR subs has an above investment grade (I believe A-) credit rating. I will leave it to Bill to determine whether a parent guarantee is required or appropriate; however, provision of the guarantee would provide somewhat of a fix to the several liability structure. I have been advised that NSTAR has a board meeting on Monday and would like to see the draft tomorrow. In this regard it would be greatly appreciate if you could provide comments on the document by tomorrow morning. Regards CJG ---------------------- Forwarded by Chris Gaffney/TOR/ECT on 09/28/2000 10:01 AM --------------------------- "MICHAEL W E DIDRIKSEN" <MDIDRIKSEN@LLGM.COM< on 09/27/2000 11:21:48 PM To: <cgaffne@enron.com<, <dallegre@enron.com<, <jader@enron.com<, <john.llodra@enron.com<, <Mark.Bernstein@enron.com< cc: "JOHN G KLAUBERG" <JKLAUBER@LLGM.COM< Subject: Revised NSTAR WPSA Per the request of John Klauberg, attached please find a marked copy of a new version of the NSTAR WPSA, revised to reflect the changes to the transaction following your meeting with NSTAR. I have marked the draft to show changes from the original six month transaction. Please be advised that John Klauberg has not yet reviewed the draft, but is receiving it at the same time as you are. Please call me if you have any questions. I can be reached at the number below. Mike Didriksen _____________________________________________________________ NOTICE: This e-mail, including attachments, contains information that is confidential and it may be protected by the attorney/client or other privileges. This e-mail, including attachments, constitutes non-public information intended to be conveyed only to the designated recipient(s). If you are not an intended recipient, please delete this e-mail, including attachments, and notify me by return mail, e-mail or at (212)424-8352. The unauthorized use, dissemination, distribution or reproduction of this e-mail, including attachments, is prohibited and may be unlawful. Michael Didriksen LeBoeuf, Lamb, Greene & MacRae, L.L.P. 125 West 55th Street New York, NY 10019 (212)424-8352 fax: (212)424-8500 mdidriksen@llgm.com - NSTAR WPSA redline 9-27.doc
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