Just a quick update on the proposed structure from the tax perspective. 
London tax has been in discussion with our colleagues in Houston with respect 
to this proposal and a similar transaction proposed with respect to 
non-metals business (Brent Hendry - ENA Legal). 

For the Metals transactions in point, the former MG London Inc would act as 
agent for ENA in arranging the transaction with the US counterparty. ENA 
would then back the transaction (through RMT) to Enron Metals Limited. MG 
London Inc would earn a commission for arranging the transaction, and the 
cost of this commission (invoiced to ENA) together with compensation for the 
credit risk assumed would need to be recovered by ENA in the form of a 
spread. The net result is that the income attributable to the functions 
performed and risks assumed is taxed in the US, with the remaining economics 
of the metals positions being assumed by Enron Metals Limited.

We are still in discussion with ENA Tax, and hope to conclude on the above 
soonest.

REgards
Janine





Jeffrey T Hodge
20/10/2000 18:08
To: Justin Boyd/LON/ECT@ECT
cc: Alan Aronowitz/HOU/ECT@ECT, Janine Juggins/LON/ECT@ECT, Mark 
Taylor/HOU/ECT@ECT 

Subject: Re: Enron Metals  

Justin:

I agree with the comments of both Alan and Mark regarding this issue.  In 
particular, it would seem to be important to act on Mark's comments regarding 
the impact of the FCM status of  Enron Trade Services, Inc.

Jeff



	Justin Boyd
	10/16/2000 05:22 AM
		 
		 To: Alan Aronowitz/HOU/ECT@ECT, Jeffrey T Hodge/HOU/ECT@ECT, Mark 
Taylor/HOU/ECT@ECT
		 cc: Janine Juggins/LON/ECT@ECT
		 Subject: Enron Metals

Gentlemen, 

I met with Craig Young (MG US) last week, who is keen to progress metals 
business with large US corporates (e.g. Anheuser Busch), on the following 
basis:

o Assume ENA and US Corporate are existing parties to ISDA/Credit Support 
Documents (the "Master").

o ENA and US Corporate would agree to expand range of OTC products to include 
OTC metal derivatives under the Master.  The principals to the metals trades 
would therefore be the US Corporate and ENA.  These trades would however be 
"arranged" by MG London Inc. (an FCM) as "arranger" in the US for ENA.

o Enron Metals Limited (EML) from London would agree to provide metals prices 
to ENA and/or MG London Inc. in the US, and in return receive a commission 
from MG London Inc.

o ENA would back-to-back OTC metals derivatives with EML via an intra-group 
ISDA Master.

Look forward to your views.

Thanks.
Justin