Yes, for the time being until we get someone in Alan's group.  Mark



	Jordan Mintz/ENRON@enronXgate
	02/22/2001 09:18 AM
		 
		 To: Mark E Haedicke/HOU/ECT@ECT
		 cc: 
		 Subject: FW: (BN  ) AIG Declines to Pay Flashpoint Bonds, Triggers 18-Not

Mark: Who should I contact regarding legal coverage for this project?  
Insurance--Lou Stoler?
Jordan

 -----Original Message-----
From:  Glisan, Ben  
Sent: Thursday, February 22, 2001 7:23 AM
To: Fastow, Andrew S.; Kopper, Michael; Deffner, Joseph; Schnapper, Barry; 
Brown, Bill W.; Chivers, Paul; Howard, Kevin; Lipshutz, Cheryl; Thirsk, 
Jeremy; Mintz, Jordan; DeSpain, Tim
Subject: FW: (BN  ) AIG Declines to Pay Flashpoint Bonds, Triggers 18-Not

All:

Be careful of paying for insurance wraps.  Lots of noise in the system about 
insurance companies not paying.  I met with Chase last week and their credit 
guys expressed extreme skepticism over the efficacy of insurance wraps.

Tim: Talk to the market to ensure that our A1/P1 facility is still viewed as 
an A1/P1 risk.

Joe & Jordan: Scrub down the credit reserve policy, we need to make certain 
that we are in absolute compliance with the documents.  If not we need to 
clean up the documentation ASAP (it seems highly unlikely that we would not 
be making significant claims under that policy this year).

Ben
----- Forwarded by Ben Glisan/HOU/ECT on 02/22/2001 07:21 AM -----


	Barry Schnapper@ENRON 02/13/2001 03:12 PM 	   To: Ben Glisan/HOU/ECT@ECT  
cc:   Subject: FW: (BN  ) AIG Declines to Pay Flashpoint Bonds, Triggers 
18-Not


fyi
----- Forwarded by Barry Schnapper/Corp/Enron on 02/13/2001 03:12 PM -----


	Sarah Wesner/ENRON@enronXgate 02/13/2001 02:20 PM 	   To: 
dblack1@enron.com@SMTP@enronXgate, Brad Blesie/Corp/Enron@ENRON  cc: Charles 
Delacey/HOU/ECT@ECT, Barry Schnapper/Corp/Enron@Enron  Subject: FW: (BN  ) 
AIG Declines to Pay Flashpoint Bonds, Triggers 18-Not


Following is the article menioned in yesterday's meeting.  

AIG Declines to Pay Flashpoint Bonds, Triggers 18-Notch S&P Cut
2/8/1 13:3 (New York)

AIG Declines to Pay Flashpoint Bonds, Triggers 18-Notch S&P Cut

     London, Feb. 8 (Bloomberg) -- A pair of ``AAA''-rated bonds
issued by Flashpoint Ltd. suffered an 18-notch downgrade by
Standard & Poor's after a unit of American International Group
Inc. said it won't pay on insurance that guarantees the bonds.
     The $149.1 million of bonds, named Hollywood Funding No. 5.
and No. 6, were sold by the U.K. company to finance films and
television shows. S&P assigned its top rating to the securities
because they're guaranteed by Lexington Insurance Co., a
subsidiary of AIG, the world's largest insurer.
     Investors who bought the zero-coupon bonds were to be repaid
by the revenue from a basket of films. When the films didn't make
enough to cover those payments, the insurance policy was designed
to kick in. Lexington, though, said it won't cover the shortfall
because the film company broke its contract. Now, S&P regards the
bonds as ``vulnerable to nonpayment,'' and rates them ``CCC-.''
     ``There has never been a downgrade of that magnitude in
Europe,'' said Kurt Sampson, head of structured finance ratings
at S&P. ``We are voicing our concern about the implications for
the capital markets. The degree of our concern is evident by the
fact we are going public with this.''
     S&P, which downgraded the Hollywood bonds on Friday, said
Lexington's actions have prompted it to review other securities
insured by Lexington in case the insurer seeks to ``raise
defenses to the payment'' due on other bonds.
     Joe Norton, AIG's spokesman, said the company won't comment
on the bonds. Graham Johnson at Flagship Group, which handles
press communications for Flashpoint, said the company regards the
bonds as ``not a matter that it's appropriate for them to comment
on.'' Credit Suisse First Boston, which managed the private sale
of Flashpoint's six Hollywood Funding bonds, also declined to
comment.

                         Cash Shortfall

     Hollywood Funding No. 5, a $48.4 million dollar bond, was
due to be repaid on Jan. 5, according to people familiar with the
security. Bondholders haven't been paid, and agreed to wait for
two months before triggering a default because Lexington is
investigating whether the issuer broke its contract with the
insurer, S&P said.
     ``The policies were to provide for sufficient funds to pay
the notes in full, should revenues in the trustee's other
accounts be insufficient,'' S&P said. ``S&P believed that the
original policies'' would pay out under any circumstances, ``and
that any such matters were not supposed to constitute a defense
to payment on the policies.''
     S&P's defines ``AAA'' ratings as those applying to issuers
with an ``extremely strong'' ability to meet their obligations.
     The rating company also said that Lexington won't be meeting
shortfalls on Hollywood Funding No. 6, a $100.7 million bond
maturing on June 18, because the issuer broke its contract by not
making as many films at it agreed to.

--Alice James in the London newsroom (44) 207 330 7195, or
ajames@bloomberg.net, with reporting by Sean Farrell /mg

Story illustration: {HOLFUN 0 6/18/01 <Corp> DES <GO>} for the
terms of one of the bonds.

NI CRA    NI BON    NI EBN    NI ABS    NI INS    NI RED
NI COR    NI FILM   NI TV     NI ENT    NI LAW    NI ENH
NI EUB    NI PVT    NI WIN

AIG US <Equity> CN
-0- (BN ) Feb/08/2001 18:03 GMT