I am not sure what process is in place, but at first glance, I am not sure what this letter says, except to perhaps acknowledge that they have some reason to be concerned.

Notwithstanding the tone of the commercial discussions and negotiations to date, I am concerned that the MAC letter had an obvious purpose, which should not to be discounted.  Moreover, we cannot lose this financing, and they need to be aware that they wear the risk of improperly or capriciously declaring a MAC.

Firstly, I think we need to send a written response that, although balanced is more direct (i.e. more than a comfort letter), that makes it clear that there is no reasonable basis for a MAC, thereby putting OPIC to (polite) notice that there is risk to them in not funding.  The points need to be that the recent disclosures involving Enron are not in any event material, particularly in this case, given that they are lending against the value of the project, relative to the amount of their takeout financing and with our subdebt/equity obligation, and therefore that nothing has changed form the commitment they originally made.

Secondly, we need to eliminate this risk being deferred into the Financing Agreement by focusing carefully on, and appropriately qualifying, the reps, wars, covenants and MAC conditions embodied in the Financing Agreement, to ensure that we do not merely defer this risk to the funding date.

Finally, given that they have sent the letter and the circumstances, I think we need to be careful not to make admissions that could come back to allow them to legitimize not funding.  As such, should not our response and our meetings be clearly expressed as being on a without prejudice basis?

Peter.


 -----Original Message-----
From: 	Dutt, Ranabir  
Sent:	Monday, November 19, 2001 8:27 AM
To:	Anderson, Peter N.
Cc:	Hardy Jr, John; Keohane, Peter; Gonzalez, Orlando; Wiggs, Brett; Deffner, Joseph; Engeldorf, Roseann; Chin, Julia H.
Subject:	Letter to OPIC

Peter:

Attached is the letter that John proposed with my mark-up.  Let me know if you have any comments.  I am hoping to send it out this morning prior to our meeting tomorrow.

Ranabir

 << File: Letter to OPIC, Nov 19.doc >>