Here is the credit ring we would like to do:

ENA buys from Sempra Cal02 Nymex swap @ ATM + $2
ENA sells to NY Bank Cal02 Nymex swap @ ATM + $2
NY Bank sells to Sempra Cal02 Nymex swap @ ATM + $2

We can then do an opposite ring of ATM trades to keep counterparty positions flat.
ENA release margin to Sempra. Sempra posts margin to NY bank based on their ISDA contractual rights. NY Bank's Enron credit exposure is replaced with Sempra.

All the trades would fall within our existing ISDAs. Our lawyers have added some language for the confirms that would tie the first ring of trades together. That language is included below. If you have any legal questions feel free to call our lawyer Mark Taylor at 713-853-7459.

If you have any questions feel free to call me at 713-853-7058.

Geof Storey



"Each of the parties to this Agreement recognizes and acknowledges that the parties are acting and agreeing to perform their obligations hereunder in reliance upon (i) the timely execution and delivery by [legal name of other counterparty] ("Third Party") and Party A of a transaction in substantially the form attached hereto as Exhibit A ("Third Party Transaction A") and would not otherwise agree to execute, deliver and perform under this Agreement if Third Party and Party A were not contemporaneously executing and delivering Third Party Transaction A and (ii) the timely execution and delivery by Third Party and Party B of a transaction in substantially the form attached hereto as Exhibit B ("Third party Transaction B") and would not otherwise agree to execute, deliver and perform under this Agreement if Third Party and Party B were not contemporaneously executing and delivering Third party Transaction B. The effectiveness of this Agreement shall be subject to the condition that contemporaneously with the execution and delivery of this Agreement Party A and Third Party execute and deliver Third Party Transaction A and Party B and Third Party execute and deliver Third Party Transaction B."


-----Original Message-----
From: Todd Esse [mailto:tesse@sempratrading.com]
Sent: Thursday, November 01, 2001 1:10 PM
To: 'gstorey@enron.com'
Cc: 'lavorato@enron.com'
Subject: Proposed trades


Please see the attached list of trades that we would appreciate doing with
yourselves today.  If there are any questions please give me a call at 203
355 5888.  Thank you very much.
Regards

Todd

  <<FW: more bookouts>>  <<These are the proposed Duke trades>>  <<These are
the proposed El Paso Trades>> 


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