sox financing update the so 2 emissions credits inventory transaction with barclays bank plc has been extended for 12 more months as of yesterday , november 6 . barclays has arranged a facility of $ 170 million , of which $ 158 million was used as of yesterday . as a condition of extending the term past yesterday , barclays required collateral in the form of a cash deposit or an l / c from an acceptable bank . we have posted cash until l / c lines become available . the cash raised , net of collateral posted , was approx $ 98 million , with capacity to put more so 2 credits into the facility . the facility allows enron to raise cash off - balance sheet without leaving us with short positions in our so 2 book .
as a condition of barclays accepting cash collateral instead of an l / c , we amended the swap master between ena and barclays plc to reduce the number of days to pay to avoid a payment default to one business day from three business days after notification by barclays . this amendment automatically reverts back to the original three business days immediately upon enron posting an l / c to replace the cash collateral . further , barclays has agreed to review the need for collateral in six months , such that if our credit situation improves sufficiently barclays will release the collateral while leaving the facility in place .
the terms of the transaction allow egm to sell so 2 credits into the facility and call back the credits on one day ' s notice multiple times over the next year . we pay interest expense in advance as a call option premium ; if we call any credits back early , however , we receive a refund on the unused interest expense . the upfront fee was 50 bp on $ 170 mm for the year ( though we really have 13 months ) and the spread is 65 bp .
please contact soma ghosh or me if you would like further updates .
on behalf of soma ghosh
and
jim lewis
sox financing update
the so 2 emissions credits inventory transaction with barclays bank plc has been extended for 12 more months as of yesterday , november 6 . barclays has arranged a facility of $ 170 million , of which $ 158 million was used as of yesterday . as a condition of extending the term past yesterday , barclays required collateral in the form of a cash deposit or an l / c from an acceptable bank . we have posted cash until l / c lines become available . the cash raised , net of collateral posted , was approx $ 98 million , with capacity to put more so 2 credits into the facility . the facility allows enron to raise cash off - balance sheet without leaving us with short positions in our so 2 book .
as a condition of barclays accepting cash collateral instead of an l / c , we amended the swap master between ena and barclays plc to reduce the number of days to pay to avoid a payment default to one business day from three business days after notification by barclays . this amendment automatically reverts back to the original three business days immediately upon enron posting an l / c to replace the cash collateral . further , barclays has agreed to review the need for collateral in six months , such that if our credit situation improves sufficiently barclays will release the collateral while leaving the facility in place .
the terms of the transaction allow egm to sell so 2 credits into the facility and call back the credits on one day ' s notice multiple times over the next year . we pay interest expense in advance as a call option premium ; if we call any credits back early , however , we receive a refund on the unused interest expense . the upfront fee was 50 bp on $ 170 mm for the year ( though we really have 13 months ) and the spread is 65 bp .
please contact soma ghosh or me if you would like further updates .
on behalf of soma ghosh
and
jim lewis