Please address, and I'll check with Legal as well.  We typically only book 
deals when everything is signed off.  Jeff
----- Forwarded by Jeffrey A Shankman/HOU/ECT on 01/26/2001 11:58 AM -----

	David Hoog
	01/26/2001 09:37 AM
		 
		 To: Jeffrey A Shankman/HOU/ECT@ECT
		 cc: 
		 Subject: multi-trigger option contract

following up on our discussion yesterday; for these types of deals, i dont 
think its necessary to have all the documentation of our counterparty's 
authorization to enter into the agreement.  these are short term transactions 
and requiring this documentation will cause us to lose business because 
competitive alternatives do not have such burdensome requirements.

the primary reason we need these things is for the scenario where a muni does 
a derivative deal with an open-ended downside, loses $50 million, and then 
claims that it was not a valid contract.  in our case, they are only 
hedging.  we are collecting a premium up front and their total cost is known 
up front.  therefore they will not attempt to make this claim.  even if they 
did, our risk is limited to the premium , not some big payout.

the risk of losing business is far greater than the risk of a counterparty 
trying to get their premium back.  seems like a 5 second decision to me.

is it possible to combine the standard isda and our confirm into a single 
long form?  by going away from the standard isda maybe we can eliminate these 
requirements because the payout liability is only 1-way.