I definately would not discuss this with Petrobras.  Simply confirm that 
there is no credit requirement for the Bank or that the Bank we want to use 
exceeds any credit requirement and arrange the L/C required with Robin 
Verial.  Lets not make this a bigger task than it is.




Marcus Stephan
01/10/2001 12:18 PM
To: Tracee Bersani/HOU/ECT@ECT@EES
cc: Richard A Lammers/SA/Enron@Enron, Rob G Gay/NA/Enron@Enron 

Subject: Re: Letter Credit. - NY Bank Question  

Tracee,

As I told you by phone, I don't believe it is a good idea to talk to 
Petrobr?s about the l/c before delivering it to them because they may require 
a bank's name that we don't have margin to work with right now. Since there 
isn't any limitation on location of the l/c bank on side letter or on the 
fuel contract, we don't have any other options besides Arab Bank and its 
correspondent bank in Brazil. 

If Petrobr?s have any restrictions on the l/c during our meeting or some days 
later (when we will be delivering the l/c), we can argue that there was no 
restriction on location/names of the l/c bank on contract/side letter and ask 
more time to obtain a new one or with another financial institution later.

Rick/Rob - We would like to have your opinion on this. If you believe we 
should consult Petrobr?s prior to deliver the l/c, I can talk to them and get 
their point of view on this issue.

Unfortunately, our meeting has not been confirmed yet.

Regards,
Marcus.




Tracee Bersani@ECT
01/10/2001 01:17 PM
To: Marcus Stephan/SA/Enron@ENRON@EES
cc: Richard A Lammers/SA/Enron@Enron, Rob G Gay/NA/Enron@Enron 

Subject: Re: Letter Credit. - NY Bank Question  

Marcus,

Please have a look at the side letter and contract to see if there is any 
limitation on location of the L/C bank.  ABN Amro had a local branch in 
Brazil so the $R draws would have been relatively straight forward.  However, 
with Arab Bank's New York Branch, the way a draw would work is this:

-Petrobras sends fax to Arab bank indicating a draw request
-Arab Bank will send funds to Brazil through its Brazilian correspondent bank 
and convert dollars to $R.  There would be an FX trade and fee associated. (I 
assume that Enron would pick up the cost of this.)  

The one issue we need to consider is that any draw request would take 
approximately 24 hours as it involves a correspondent bank and FX trade. 
Please confirm that Petrobras would not have a problem with this. 

Regards,
Tracee



Marcus Stephan@ENRON
01/10/2001 08:34 AM
To: Tracee Bersani@EES
cc:  
Subject: Letter Credit.

Tracee, Hi!

I was talking to a Tozzini lawyer and he said that that language on the side 
letter (" reputable institution") is a kind of standard in Brazil for such 
kind of contracts but that it doesn't have any correlation to any  credit 
rating standard. So, I believe we won't have any problems with the l/c from 
Arab Bank.
I also read the fuel contract and realized that there is no restrictions or 
requirements for the  letter of credit except for its amount.

How is the l/c issuance going?  Will we be able to have it on Friday?

Regards/Marcus.