national bank of canada ( nbc ) louise and bill ,
as you are aware , nbc has sent us notification of an event of default under the isda due to our failure to post collateral ( in the form of an lc ) . to date , nbc has resisted all of our commercial solutions to this issue . at the close of business today , our cure period for the event of default will expire , and nbc will be able to draw on the $ 1 . 4 mm lc posted and terminate the contract . today we have seen a bit of movement in their position . they are now willing to accept cash as collateral if enron will agree to reduce its collateral threshold to some agreed upon amount . bill bonnell , their credit manager , has suggested $ 4 mm as the appropriate level . this would entail enron posting $ 3 mm in addition to the $ 500 k collateral call for a total of $ 3 . 5 mm . i believe we could more than likely negotiate the threshold to $ 5 mm if we are willing to post the cash . a $ 5 mm level would require an additional posting of $ 2 mm which is what we originally forecasted to try to buy down the position exposure . as we must have a resolution today to forestall further action on the part of nbc , please advise as to management ' s willingness to use cash for the purpose of preventing termination of this contract .
thanks ,
tanya
national bank of canada ( nbc )
louise and bill ,
as you are aware , nbc has sent us notification of an event of default under the isda due to our failure to post collateral ( in the form of an lc ) . to date , nbc has resisted all of our commercial solutions to this issue . at the close of business today , our cure period for the event of default will expire , and nbc will be able to draw on the $ 1 . 4 mm lc posted and terminate the contract . today we have seen a bit of movement in their position . they are now willing to accept cash as collateral if enron will agree to reduce its collateral threshold to some agreed upon amount . bill bonnell , their credit manager , has suggested $ 4 mm as the appropriate level . this would entail enron posting $ 3 mm in addition to the $ 500 k collateral call for a total of $ 3 . 5 mm . i believe we could more than likely negotiate the threshold to $ 5 mm if we are willing to post the cash . a $ 5 mm level would require an additional posting of $ 2 mm which is what we originally forecasted to try to buy down the position exposure . as we must have a resolution today to forestall further action on the part of nbc , please advise as to management ' s willingness to use cash for the purpose of preventing termination of this contract .
thanks ,
tanya