Scott, V&E will send you the structures and the most recent version of the 
Info Memo.  The structures will need some explanation, since we have not 
finalized all of the moves into a final sale structure.  Shelley Barber can 
go over this with you.  Also, be aware that some or all of these entities are 
in the Rawhide structure already, and that we intended to unwind them from 
R-hide as a condition to closing.  Would we have to unwind them before 
completing the swap?  If so, that would be a major roadblock to the swap 
going effective early next week.  

Thanks,
Randy




Scott Sefton@ECT
09/22/2000 01:18 PM
To: Frank Stabler/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Randy 
Young/NA/Enron@Enron
cc: Ryan Siurek/Corp/Enron@ENRON, Sara Shackleton/HOU/ECT@ECT 

Subject: Equity Hedges for CEG, CEG Rio and Gaspart LDCs

I understand that management has decided to hedge our equity interests in 
these three assets. I've been asked to complete this on Monday of next week 
(sorry for the short notice, I think this decision was made only yesterday). 
These hedges will be done in a structured hedging facility known as Raptor 2.

In order to write the confirms and complete this process, we'll need at least 
to do the following. 

We'll need a complete description of the equity interest we're hedging. We'll 
need the full legal name of the issuer of the equity interest, a full legal 
description of the equity interest (common stock, preferred stock, warrants, 
etc.), the number of the certificate (if any) representing the interest  and 
the number of shares or warrants being hedged.

I understand that the hedge will be structured as a price return swap and the 
initial equity notional amount of the swap will be based on the book value of 
the equity interest. It would be helpful to see the latest financial 
statements showing that book value.

We will also need to investigate whether any contractual or other legal 
restrictions may affect our ability to enter into these hedges.

This is an initial list that I've prepared very quickly. I'll be reviewing 
this with Sara later today and will supplement this email as necessary.

Randy, I've tried to reach Frank this morning but he is traveling. Can you or 
someone on your staff assist us on this? Thanks!