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Enron Mail |
This is a forward power contract. It is actually a one-off contract so no
master agreement (and no CSA at least at the moment). It's an option arrangement whereby we have an option for each of four years (years 2-5 of the deal) to supply power at preagreed terms. We pay the option premium during year one by means of a rebate to the customer of a fixed % of their electricity costs. I guess we just have to include additional provisions to the agreement covering the various credit issues which need to be dealt with, but I am not quite sure where to start in a stand alone agreement situation. Sorry about this. Thanks. Ps. We are under enormous pressure to get this deal done ASAP and in any case by Christmas - this is the first forward power deal we will actually sign. Alan Aronowitz@ECT 2000/11/28 08:19 To: Jane McBride/AP/Enron@ENRON cc: John Suttle/HOU/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT, Sara Shackleton/HOU/ECT@ECT Subject: Re: credit for Nippon Chemi-con Jane: I believe the attached credit worksheet describes language that would be included in the Credit Support Annex. John/Sara, do you have any go by's to assist Jane on this one. Thanks for your help. Alan Jane McBride@ENRON 11/27/2000 05:11 PM To: John Suttle/HOU/ECT@ECT cc: Alan Aronowitz/HOU/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT Subject: Re: credit for Nippon Chemi-con Hi John, Thanks for this, just wondering though, how do you usually get from this sort of table to the actual provisions to include in the contract. Alan, Mark, is there any easy way to do this? Thanks. Jane John Suttle@ECT 2000/11/28 07:05 To: Morten E Pettersen/AP/Enron@Enron cc: Jane McBride/AP/Enron@Enron, Joseph P Hirl/AP/ENRON@ENRON Subject: credit for Nippon Chemi-con Morten Erik - I recommend the credit terms provided in the attached document to be included in the Nippon Chemi-con contract. These are industry standard terms for a counterparty with credentials such as Nippon-Chemi-con, and these industry standards are what will enable Enron to syndicate the credit risk if we decide to do so in the future. After my discussion with Jonathan last week, I think it is clear that Credit is on the same page with your team in that we recognize the importance of getting this first deal booked. I think that in proposing the terms of your transaction to the counterparty though, Enron can begin educating the market as to the nature of the credit risk imbedded in the deal structure, and in doing so, begin setting the same standards we have in our other portfolios. The attached credit terms are not set in stone, but I think they are a good place to start. I will make myself available to you and the counterparty to discuss the credit terms, and we will be very willing to negotiate the terms in good faith. My point is simply that we should not enter into any of these transactions without fully discussing the credit implications with the counterparty. Please feel free to call me or write if you have any questions or concerns. John x30906
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