Travis,

Apologies for the delayed response - we have had some e-mails problems this week.

Understood and agreed on the need for equity certificates.  As you know, in the US there is no bright line amount of equity that is required in order to obtain the best treatment, so therefore we
thought it best for both you and we to do our research for Japan and then approach counsel.  We should have our opinion formed shortly both on the feasibility of equity treatment for the fixed income
investors and on the need for certificates.

We'd like to talk through a couple more alternatives to make sure we understand the accounting restrictions to cross-default in orders.  I'll call you to discuss further.  In that call I'd also like
to make sure that I understand the prepay.

Finally, we are working through a couple of accounting issues on the CLN and also on the reps that you want from Merrill.

I am traveling tomorrow and will call you on Monday.

Regards,

Adam



-----Original Message-----
From: Winfrey, Travis [mailto:Travis.Winfrey@ENRON.com]
Sent: Tuesday, October 16, 2001 2:41 PM
To: Adam Kulick (E-mail)
Cc: Boyle, Dan; Mitchell, David; Walden, Clint; Bahlmann, Gareth;
Rohauer, Tanya; Shackleton, Sara
Subject: Yen CLN follow-up


	Adam,

	To follow-up on our discussion from last week:

	With regards to the need for equity/certificates at the Trust
level, this is really a function of the requirements posed by the
investors.  Our tax group would defer to the underwriters. If the note
investors can tolerate equity treatment (for tax purposes), then there
should be no need for certificates in the structure.  In previous
transactions, the presence of certificates has allowed the notes to be
treated as debt for tax purposes and therefore the payments treated as
interest income.

	With regards to cross-default, a default in the Enron note does
not result in a default of the swap between Enron and the third party
entity or a default of the swap between Enron and the financial
institution.


	Attached is a diagram of the prepay structure, as discussed last
week.

	 <<CLN Prepay Diagram - Merrill Lynch.ppt>>


	Feel free to call with any questions.

	Regards,
	Travis Winfrey
	Enron Global Finance
	713-345-8404
	Travis.Winfrey@enron.com



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