---------------------- Forwarded by Jeffrey C Gossett/HOU/ECT on 12/27/2000 
06:02 PM ---------------------------
   
	
	
	From:  Sheila Glover                           12/27/2000 05:57 PM
	

To: Kam Keiser/HOU/ECT@ECT, William Kelly/HOU/ECT@ECT, David 
Baumbach/HOU/ECT@ECT, Daren J Farmer/HOU/ECT@ECT, Monica Lande/PDX/ECT@ECT, 
Jenny Latham/HOU/ECT@ECT, John Swinney/HOU/ECT@ECT, Stacey W 
White/HOU/ECT@ECT, Frank Prejean/HOU/ECT@ECT, Brenda F Herod/HOU/ECT@ECT, 
Kathy Reeves/CAL/ECT@ECT, Jeffrey C Gossett/HOU/ECT@ECT, Scott 
Earnest/HOU/ECT@ECT, Tracy Beardmore/NA/Enron@Enron, Michael 
Giarratano/NA/Enron@ENRON, Shifali Sharma/NA/Enron@Enron, Kristin 
Albrecht/Enron Communications@Enron Communications, Gary Stadler/Enron 
Communications@Enron Communications, Reno Casimir/NA/Enron@ENRON, Mary 
Thambiah/LON/ECT@ECT, Sheila Foo/LON/ECT@ECT, Paul D'Arcy/LON/ECT@ECT, David 
A Wall/Risk Mgmt/LON/ECT@ECT, Mike Jordan/LON/ECT@ECT, Hege 
Kleven/OSL/ECT@ECT, Simon Thurbin/HOU/ECT@ECT, Trond Branem 
Hansen/OSL/ECT@ECT, Coralie Evans/LON/ECT@ECT
cc: Gary Hickerson/HOU/ECT@ECT, Pushkar Shahi/HOU/ECT@ECT, Ellen 
Su/Corp/Enron@Enron, Shane Dallmann/LON/ECT@ECT, Brent A Price/HOU/ECT@ECT, 
Sally Beck/HOU/ECT@ECT, Clara Carrington/HOU/ECT@ECT 
Subject: Interest-Rate Hedging Guides - REMINDER

Just a reminder....
Please advise the Rate & Currency Trading Desk when large deals are going to 
be booked by 1:30 P.M. (CST).  This allows the desk to hedge the deal for 
interest rates on the same day that the trade is booked in the commodity 
books.  This eliminates Enron's exposure to markets on the following day for 
these large deals.  

If the Rate & Currency Trading Desk is not notified of large deals prior to 
1:30 P.M., the desk will hedge the interest-rate exposure the next day on a 
best efforts basis.  On these deals, any resulting profit or loss in excess 
of $20,000 will be passed back to the originating group by the trading desk.

We request that the book adminstrator advise Clara Carrington, 3-9224, and 
the Traders should be advising Pushkar Shahi, 3-9199, or Ellen Su, 3-5256, on 
the Rate & Currency Trading Desk.  Europe should contact Shane Dallman, 
3-4997. in the London office. 

Ellen has put together some guidelines which you can share with your traders 
regarding the sizing for large deals.   This is included below.

Your cooperation is appreciated.
Sheila

Guidelines:
The following is a guide to the profit/loss levels in various tenors that 
would require notification of the interest-rate desk.  

Tenor  Notional Cash Flows
2y  30,000,000
3y  20,000,000
5y  15,000,000
10y  10,000,000
15y  7,000,000
20y  5,000,000

Please remember that these amounts are not cumulative.  Each bucket needs to 
be evaluated alone, and then aggregated.  For example, if you had a -30mm 
notional cash flow in the 2-year bucket and it is offset by a +30mm notional 
cash flow in the 20-year bucket, the result would still be very significant 
as the net long cash flow position would still be around +25mm 20-year cash 
flows.

As always, if you are ever unsure, we are more than happy to look at 
deals/curve changes to determine significance.  Thanks.

Ellen Su
(713) 853-5256