Rod:
Do you and Diana have a copy of the ISDA master between ENA and Kaiser?  If 
not, here is a summary of some of the Kaiser credit related provisions:

 1. $30,000,000 cross default threshold

2. MAC Event of Default - As to Kaiser, a MAC occurs if either an Event of 
Default occurs under the 2/15/94 Credit Agreement with BankAmerica or its 
credit rating drops to B- or below by S&P and B3  or below by Moody's.  In 
each case, if they deliver collateral, no Event of Default occurs.

3. Collateral Threshold equal to ENA's Net Exposure which goes to zero if a 
MAC occurs and there is a failure to deliver collateral within 90 days or an 
Event of Default occurs.

4. $1,000,000 rounding amounts


With respect to setoff rights, I spoke with David Mitchell about this and if 
it turns out that both types of swap transactions are done with the same 
Kaiser entity but different Enron entities and the metals ISDA has 
appropriate setoff language, then we feel fairly comfortable that upon a 
Kaiser bankruptcy filing in the US, we would be able to exercise setoff 
rights.


What is the next step?

Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com



	Roderick Nelson/Enron@EUEnronXGate
	05/25/2001 09:15 AM
		 
		 To: Carol St Clair/HOU/ECT@ECT, Diana Higgins/Enron@EUEnronXGate
		 cc: 
		 Subject: RE: Kaiser

Hi Carol.  Great to hear from you.  I hope all is going well.  

Diana Higgins who is a manager (credit) in the metal area will be the 
principal credit person.  I would say that Kaiser is a low grade credit and 
the contract should be robust with early termination and collateral rights.

 -----Original Message-----
From:  St Clair, Carol  
Sent: 25 May 2001 15:02
To: Nelson, Roderick; Simons, Paul
Cc: Shackleton, Sara
Subject: Kaiser
Importance: High

Rod and Paul:
I have checked the ISDA between Kaiser and ENA and it has our standard setoff 
language which permits setoff of amounts owed by or to the Non-Defaulting 
Party and its Affiliates against amounts owed by or to the Defaulting Party 
under the ISDA and other agreements.  Please call me once you have located 
the Metals agreement as Greg indicated to me in a voice mail that he needs an 
answer this morning.

Rod,
If we get comfortable on the legal side with this arrangement, are there 
other credit issues that need to be considered?

Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com