Paul:

It seems to me these types of transactions (at least new ones) could be 
covered by an ISDA with some creative confirm work on our part.  It's 
certainly not necessary for us to wait for ISDA to get its act together (it 
may be quite a wait) - we can come up wit our own definitions.  The financial 
power trades might be something of a stretch but we have never had the 
question fully reviewed.  I guess this is another matter to keep in mind as 
the power pool is restructured:  to the extent we have any influence over the 
resulting structure, it would be nice if it fit easily into a standard 
financial trading structure.

Just random thoughts.

Mark




Paul Simons
11/03/98 12:52 PM
To: Paul Waine/LON/ECT@ECT
cc: Shari Stack/HOU/ECT@ECT, Marie Heard/HOU/ECT@ECT, Edmund 
Cooper/LON/ECT@ECT, Mark - ECT Legal Taylor/HOU/ECT@ECT, Lee 
Munden/LON/ECT@ECT, Tomas Valnek/LON/ECT@ECT 
Subject: Re: ISDA Master -ECTRIC- Morgan Stanley  

Paul 

Let's get the ISDA in place and then bring in deal types (b) and (c) if and 
when possible.

ISDA have been on the verge of amending the Commodity Definitions since I 
arrived at Enron!

I'll leave it to Shari to respond to your points of detail. Thanks.

Paul



Paul Waine
03/11/98 17:34
To: Shari Stack/HOU/ECT@ECT
cc: Paul Simons/LON/ECT@ECT, Marie Heard/HOU/ECT@ECT, Edmund 
Cooper/LON/ECT@ECT, Mark - ECT Legal Taylor/HOU/ECT@ECT, Lee 
Munden/LON/ECT@ECT, Tomas Valnek/LON/ECT@ECT 
Subject: Re: ISDA Master -ECTRIC- Morgan Stanley  

Shari, a new question arises re this master. ECTRIC trades following 
commodity derivatives with MS: (a) oil swaps (priced in USD), (b) UK 
electricity - "EFA" elec. forward agreement (priced in GBP) and (c) Nordic 
power (priced in norwegian kroner). Are all these commodities covered by the 
master - at present the latter 2 are probably not covered by an ISDA 
commodity definition, although I understand A&O plan to work on these 
definitions with interested parties in UK/Europe. How does the ISDA deal with 
FX differences - I guess there is a standard approach - GBP and NOK converted 
to USD at spot rate for collateral purposes.

Regards

Paul




Shari Stack
28/10/98 19:11
To: Paul Waine/LON/ECT@ECT
cc: Paul Simons/LON/ECT@ECT, Marie Heard/HOU/ECT@ECT, Edmund 
Cooper/LON/ECT@ECT, Mark - ECT Legal Taylor/HOU/ECT@ECT 
Subject: ISDA Master -ECTRIC- Morgan Stanley

I was forwarded a copy of your email to Marie Heard and Paul Simons dated 
10/19/98. In response to your queries: 

1. Date of the Agreement: Notes in our file state that "Francesca" in London 
advised that the earliest outstanding trade between the 2 counterparts is 
Nov. 4 '93. From a legal perspective, it does no harm to leave the date as is 
since all it means is that the Agreement is effective as of that day.    

2. "Transferable Letter of Credit": ECT's standard is to have "transferable" 
L/C's in order to be consistent with the "transfer" language included in our 
Master Agreements. The rationale is that if ECT wanted to transfer its 
rights/obligations under the Agreement to an Affiliate, we would want the L/C 
to be transferable as well. Put another way - having a non-transferable L/C 
would be at cross purposes with having a transferable Agreement. 

Also, we in Houston were not aware that ECTRIC does not normally use 
"transferable" L/C's. Perhaps this should be made clear to whomever does 
ECTRIC's documentation in the future.

In any case, can you pls let me know whether you are happy for "transferable" 
to remain in or whether I should go back to MS and ask for it to be 
deleted.    

3. Name of Guaranteed Party: Agree to change; Marie will have a new first 
page of the Guarantee prepared and forwarded to you. 

4. Guarantee from MS: The normal procedure is for them to send us their 
signed Guarantee when they return our execution copies. The form, though, has 
already been agreed and Marie will send you a copy for your information. 

5. Collateral: I have discussed this with Paul Simons. As I understand it,  
you have concerns whether in the event of the insolvency of MS, ECTRIC could 
redeem cash or US T-Bills in order to fulfil MS's obligations to ECTRIC. Mark 
Taylor feels that ECTRIC would have an enforceable security interest in cash 
even though it may be held in London. Regarding the T-Bills, Paul  mentioned 
that there is to be a meeting on this and other matters in the next few 
weeks. 

In order for us to go ahead and finalise the Agreement, I would be happy to 
go back to MS and ask that US T-Bills be deleted as a form of Eligible 
Collateral.      

Pls let me know with regard to points 2 & 5 as soon as possible. 

Kind regards, 

Shari Stack