Thanks for the clarification. I originally thought we were talking about an 
ISDA arrangement and that's why I suggested Sara to assist.

I will visit with John Suttle today and determine the best way forward on the 
credit-related language for this physical deal. We will revert back to you 
very shortly.

Alan



	Jane McBride@ENRON
	11/27/2000 05:28 PM
		
		 To: Alan Aronowitz/HOU/ECT@ECT
		 cc: John Suttle/HOU/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT, Sara 
Shackleton/HOU/ECT@ECT
		 Subject: Re: credit for Nippon Chemi-con

This is a forward power contract.  It is actually a one-off contract so no 
master agreement (and no CSA at least at the moment). It's an option 
arrangement whereby we have an option for each of four years (years 2-5 of 
the deal) to supply power at preagreed terms.  We pay the option premium 
during year one by means of a rebate to the customer of a fixed % of their 
electricity costs.

I guess we just have to include additional provisions to the agreement 
covering the various credit issues which need to be dealt with, but I am not 
quite sure where to start in a stand alone agreement situation.

Sorry about this.

Thanks.

Ps. We are under enormous pressure to get this deal done ASAP and in any case 
by Christmas - this is the first forward power deal we will actually sign.




	Alan Aronowitz@ECT
	2000/11/28 08:19
		
		 To: Jane McBride/AP/Enron@ENRON
		 cc: John Suttle/HOU/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT, Sara 
Shackleton/HOU/ECT@ECT
		 Subject: Re: credit for Nippon Chemi-con

Jane:

I believe the attached credit worksheet describes language that would be 
included in the Credit Support Annex.

John/Sara, do you have any go by's to assist Jane on this one.

Thanks for your help.

Alan



	Jane McBride@ENRON
	11/27/2000 05:11 PM
		
		 To: John Suttle/HOU/ECT@ECT
		 cc: Alan Aronowitz/HOU/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT
		 Subject: Re: credit for Nippon Chemi-con


Hi John,

Thanks for this, just wondering though, how do you usually get from this sort 
of table to the actual provisions to include in the contract.  Alan, Mark, is 
there any easy way to do this?

Thanks.

Jane 




	John Suttle@ECT
	2000/11/28 07:05
		 
		 To: Morten E Pettersen/AP/Enron@Enron
		 cc: Jane McBride/AP/Enron@Enron, Joseph P Hirl/AP/ENRON@ENRON
		 Subject: credit for Nippon Chemi-con

Morten Erik - 

I recommend the credit terms provided in the attached document to be included 
in the Nippon Chemi-con contract.  These are industry standard terms for a 
counterparty with credentials such as Nippon-Chemi-con, and these industry 
standards are what will enable Enron to syndicate the credit risk if we 
decide to do so in the future.  

After my discussion with Jonathan last week, I think it is clear that Credit 
is on the same page with your team in that we recognize the importance of 
getting this first deal booked.  I think that in proposing the terms of your 
transaction to the counterparty though, Enron can begin educating the market 
as to the nature of the credit risk imbedded in the deal structure, and in 
doing so, begin setting the same standards we have in our other portfolios.  
The attached credit terms are not set in stone, but I think they are a good 
place to start.  I will make myself available to you and the counterparty to 
discuss the credit terms, and we will be very willing to negotiate the terms 
in good faith.  

My point is simply that we should not enter into any of these transactions 
without fully discussing the credit implications with the counterparty.
 
Please feel free to call me or write if you have any questions or concerns.

John  
x30906