Re: Financial Trading in Brazil

Hello AFAC and Marcelo: Attached is a recent "short list" of possible
products which our traders may be interested in trading in the near future.
The list was created by Bruce Harris who resides in Houston but travels
frequently to Brazil. Bruce will join us by telephone next week.
My goal is to discuss in depth the memo which you created on October 19,
further research (specifically a memo regarding OTC swaps!) and Bruce's
list. Lynn Aven (tax) and Brent Hendry (legal in Argentina) will be present,
as will Andrea Bertone. We will conference in Bruce and possibly others from
Houston. This will be my last message from Houston as Enron will be closed
later today for the Thanksgiving holiday and will reopen on Monday, November
29. I'll be in our Sao Paulo office that day. I'm looking forward to our
meeting on Tuesday, November 30 at 2 pm. See you both soon. Regards. Sara
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 11/24/99 09:16
AM ---------------------------

Sara Shackleton
11/05/99 09:28 AM
To: Brent Hendry/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:
Subject: Re: Financial Trading in Brazil

---------------------- Forwarded by Sara Shackleton/HOU/ECT on 11/05/99 09:27
AM ---------------------------
To: Sara Shackleton/HOU/ECT@ECT
cc: Gary Hickerson/HOU/ECT@ECT, Lynn
Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shari Stack/HOU/ECT@ECT, Joe
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pushkar Shahi/HOU/ECT@ECT
Subject: Re: Financial Trading in Brazil

I am not aware of any products that need to be identified prior to 12/31/99.
Going forward into next year, the following products might be of interest for
trading. Our current plan for managing risk is via offshore products through
Gary's group due to tax and regulatory reasons.

1. Brazil corporate eurobonds
2. Brazil Brady bonds
3. Other country corporate and/or Brady bonds (ie, can a Brazil limitada own
an Argentine eurobond?)
4. Bovespa index futures
5. R$ currency futures
6. Local Treasury bills (both US$ indexed and R$ rate) such as BBCs, LBCs,
LTNs, NTNs, NBCs, etc
7. R$ currency forwards
8. Rules/regulations/tax effects on individual stock trades
9. Local company commercial paper (typically trades at 105% to 110% multiple
to the overnight rate depending on credit).

As discussed, it would be interesting to see what the tax effects are on each
type of investment, what margin is required, and what offshore alternatives
are available for items #4-8 (the first 3 are bringing offshore items into
Brazil, which we might do if there was a tax benefit that could be obtained).

Thanks, Bruce

Sara Shackleton@ECT
11/02/99 03:44 PM
To: Gary Hickerson/HOU/ECT@ECT
cc: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shari Stack/HOU/ECT@ECT

Subject: Financial Trading in Brazil

Before my next meeting with the Tozzini lawyers this month, I would like to
create a list of SPECIFIC products for managing Enron's Brazilian risk.
Bruce Harris is creating a list which he will forward to you shortly. Please
review this list, comment and identify any products required for trading
prior to December 31, 1999. Please let me hear from you if you would like to
discuss any issues in particular. Thanks. Sara