Repo Agreements

Credit has reviewed the financials of Merrill, Lynch, Pierce, Fenner & Smith,
Inc. and Merrill Lynch Government Securities Inc. We approve entering into
the proposed repo agreements with these entities due to 1) the secured nature
of Enron's potential exposure, 2) their very strong balance sheets and 3) the
relatively short term nature of our positions. Potential exposures of up to
$500 Million with each of these entities is within our credit risk tolerance
for these counterparties. We understand that there will be no guarantees
required from either counterparty.