Something for us to talk about during our next staff meeting.

There are three projects which have significant cash flow problems and thus difficulties in meeting debt obligations: these are: SECLP, Panama and Gaza.  In the past, as I suppose we have done in Dabhol, we have taken the position that we would not inject cash into these companies and would be prepared to face a default and possible acceleration of the loans.  SECLP has been the biggest issue/problem.  Panama is much less (a few million of floating of our receivables from the company) would be sufficient to meet the cash crunch in April of this year.  Note that, in Panama, the debt is fully guaranteed by the government and is non-recoursed to the operating company, BLM.  In the past, we have discussed letting the debt default, which would cause the bank to potentially seek complete payment and acceleration from the GoPanama.  The reason: the vast majority of BLM's problems stem from actions taken by the regulator that have effectively amended our PPA's with private parties; those actions resulted in significant loss of revenues, which although today have stopped or have been limited, have left a "mark" on the company's liquidity position.  

Now the question is: come April of 2002, should any of our actions in Panama or decisions related thereto (which we would have otherwise taken or made) be affected in any way by either the proposed merger or an effort by Enron to preserve efforts to re-establish investor/creditor confidence?  The same could go for SECLP and Gaza.

This is simply an overall "guidance" question.  Let's take it up during our staff meeting next week, if that's ok with you.

Many thanks, Mariella