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Enron Mail |
Prior to our meeting, I wanted to explain some of the background to what
we are attempting to do here. Since surety companies cannot issue bonds in the form of financial guarantees, we have worked with our surety companies so that they feel comfortable that the bonds do not fit this category. Our sureties have agreed to issue bonds as a partial guarantee to individual Confirmation letters. There will be separate bonds for each individual Confirmation Letter.The bonds will run for an annual term or, in the case of Firemens Fund, up to a two year term. We worked with the sureties to develop a bond form that would specifically tie back into individual Confirmation letters so as to enable the sureties to approve the bond as a performance guarantee (based on the guarantee of the actual supply of power), not a financial guarantee, and to carve the individual Confirmation letters out of the Master Power Purchase Contract. This was done because the sureties were unwilling and/or unable to bond the Master Power Purchase Agreement due to its language and extremely broad scope.The individual transactions that were to be bonded each had specific performance obligations and we planned to bond each of these transactions individually. The sureties have approved the form of bond that we had provided, and we would like to keep changes to the bond form itself to a minimum. If you see any issues with the above, please give me a call before 2 today. Thanks. Janet K. Greene Reliant Resources, Inc. 1111 Louisiana, Suite 4300 Houston, TX 77002 713-207-5732 fax: 713-207-0141 jkgreene@reliant.com
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