Jack:
Thanks for your e-mail.  I met with our credit people this morning and can 
respond to some of the credit points raised in your May 16th memo:

1. With respect to item #2, I know of no case law on this point and our 
credit group cannot agree to delete this concept from the Collateral 
Threshold definition.  

2. With respect to item #3, we can agree to define materially weaker the way 
you suggested with  additional language that states that any drop below BBB- 
also counts as a trigger.

3. With respect to item #4, we can agree to a definition tied to an objective 
rate which my credit person is thinking about.

4. With respect to item #6, I'm waiting for my credit person to confirm that 
your comment is correct.

5. I understand from your latest e-mail that no changes will be made to the 
definition and use of affiliates in any of the agreements.

6. With respect to item #12, we can agree to increase our rounding amount to 
$500,000 and to limit "returns" of collateral to once a week.  We cannot 
agree to change  the frequency for requesting/delivering collateral.  Given 
the high rounding intervals, we feel that unless there is a huge market 
change, it is unlikely that collateral requests will be made every day.

7. With respect to item #14, there is no requirement to escrow cash 
collateral that is being held and the Secured Party is free to do whatever it 
wants to with the cash until the events in 13(g)(ii) occur, in which case the 
cash collateral must be held by a Qualified Institution.

8. With respect to item #19, if we draw the entire amount of the LC and the 
termination amount that we are owed is less than the LC amount, we would be 
required under the documents to return any excess amount to you.  All we are 
doing in an Event of Default situation is converting the LC into cash 
collateral that we hold subject to the terms of the documents.

9. We can agree to make the chnages that you requested in item #18.

I still need some clarification on the point you were making in item #17 and 
I will look at your other comments in today's e-mail and respond shortly.  
Are you okay with the Enron and Inland forms of Guaranty? 

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



	"Falconi, Jack (TIFS)" <Jack.Falconi@guarantygroup.com>
	06/05/2001 02:07 PM
		 
		 To: Carol.St.Clair@enron.com
		 cc: Ken.Curry@enron.com
		 Subject: IPPI ISDA - Response To 5/29 E-Mail


Please acknowledge receipt.  Thanx.

       <<IPPIISDA3.doc>>

 - IPPIISDA3.doc