Sara,

I think we need to explain the collateral transfer provision to Rose.  I 
don't think she understands what the $0 transfer amount means.We do not want 
to wait until we have $500,000 of exposure to Global.  We are happy to 
exchange collateral in $250,000 increments.  So if Global owes Enron $1, we 
want the first $250,000 in collateral.  If Enron owes Global $1, we are 
willing to post the first $250,000.  The reality is that we will not call if 
the exposure is immaterial.  It's not worth our time.   But since we are 
already taking intra day credit risk, we have no desire to add another 
$500,000 to that exposure.

As far as the cross default goes, we see it as a matter of proportion.  Enron 
has $53 Billion in assets:  Moore has $1.3 Billion.  Accordingly, a default 
of $100 Million would have substantially different implications for each of 
these entities.  So to say that they have been willing to go as high as 2 to 
1 puzzles me.  I don't really know what the basis for that ratio is.  

Anyway, we will no doubt have to talk through these issues with the 
counterparty.  I am ready when you are.

Paul


From: Sara Shackleton@ECT on 02/09/2001 12:00 PM
To: Paul Radous/Corp/Enron@ENRON
cc:  

Subject: ISDA between Enron &  MGI

Paul:  I'll begin reviewing the comments but you'll have to think about the 
credit related issues.  Let me know if you'd like to schedule some time to 
discuss.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com
----- Forwarded by Sara Shackleton/HOU/ECT on 02/09/2001 12:03 PM -----

	Rose Liu <rose.liu@moorecap.com>
	02/09/2001 09:35 AM
		 
		 To: "'sara.shackleton@enron.com'" <sara.shackleton@enron.com>
		 cc: Joe Hamilton <joe.hamilton@moorecap.com>, Jeff Popock 
<jeff.popock@moorecap.com>
		 Subject: ISDA between Enron &  MGI


Sara - Please find attached the latest version of the ISDA document between
Enron & Moore Global Investments, Ltd. as well as our comments which can be
found below as well as written on the document itself. Please note that also
included in the fax are some revisions to the legal opinion.  I will send to
you any comments regarding the guaranty once our lawyer has completed his
review.

Schedule:
Part 1 (c) "Threshold Amount" - We are willing to accept your proposal for
the flat number of $100 million for Enron, but we cannot accept $2 million
for the Moore Global.  The majority of our documents are bilateral in
nature, but we have accepted a 2:1 ratio, thus we have proposed $50 million
for Moore Global.  Please reconsider.

Part 3(b) Documents to be delivered - I have added the legal opinion
language, but I just wanted to confirm that Enron will pay for these
requested legal opinions.  I found out that FIF Master Fund, Ltd  also uses
Graham Thompson as outside counsel.


Credit Support Annex:
Paragraph 13 (b)(iv) - Thresholds - We are willing to accept a $0 Threshold
even though with most of our counterparties, we have at least a $5 million
threshold.   On the other hand, we find it to be a operational nuisance to
have to transfer collateral back and forth with a "minimum transfer amount"
of zero, thus we would like to stick with $500,000 since we do not think
$500,000 is an unreasonable amount of exposure for either party and it would
eliminate the nuisance factor.

Thank you very much for your help in this matter and we look forward to
hearing from you.

Regards-

Rose




 - fax1.tif