Just to add to Peter's comments - the fundamental premise of the UBS transaction would be the backing of the double A+ balance sheet as the contracting party. To think that counterparties will accept a parental guarantee is unrealistic.

 -----Original Message-----
From: 	Keohane, Peter  
Sent:	Monday, February 04, 2002 8:04 AM
To:	Kitchen, Louise; 'pat.odonnell@ubsw.com'
Cc:	Haedicke, Mark E.; Milnthorp, Rob; Crawford, Sharon
Subject:	RE: Please help

To clarify:

1.  The guarantee issue is already in play with the Canadian pipelines, power pools, office landlords, etc. and will be an impediment to closing and/or commencing business operations;

2.  It is not that counterparties will be unlikely to transact with this new UBSW Canadian entity without credit support ... they will not;

3.  Although parental g'ee of UBS AG as credit support will help, the structure of a non-creditworthy sub supported by a parental g'ee (with its own terms, conditions and limits) is the old Enron structure, and it may well not be well received in the industry.

Peter.

 -----Original Message-----
From: 	Kitchen, Louise  
Sent:	Monday, February 04, 2002 7:58 AM
To:	'pat.odonnell@ubsw.com'
Cc:	Haedicke, Mark E.; Milnthorp, Rob; Keohane, Peter
Subject:	Please help

Canada appears to be an issue.

We need to make swift progress on this - unlike in the US the contracting entity with our counterparties will not be UBS AG, London Division but UBS Warburg Energy (Canada) Ltd.  With the lack of parental company guarantees forth coming from UBS, this is going to be an issue.

There are two main points, because of our current history our customers will not contract lightly with a subsidiary with no guarantee and secondly the credit group are asking for guarantees from our customers.

Please let me know how we can progress on this.

Louise