See below from Mary Ellen Bell at Louis Dreyfus.

----- Forwarded by Stephanie Panus/NA/Enron on 04/05/2001 09:16 AM -----

	BellM@louisdreyfus.com
	04/04/2001 03:39 PM
		 
		 To: stephanie.panus@enron.com
		 cc: nidia.mendoza@enron.com
		 Subject: ISDA Enron/LD Plastics

Stephanie,

Upon checking the file for a status update, I realized that during our last
draft of 3/15 I indicated that LD was still considering part (h) Liquidity
in OTC Markets.  Since you have not yet had a chance to respond to the
comments of 3/15, I thought you might want to consider this last open point
and respond to the comments in their entirety.

Please verify that my interpretation of part (h) is correct.  Is Enron
saying that if at any time Enron believes that a market quote on a swap for
periodic payment, margining or termination does not reflect what the quote
would be if there were an active market in the commodity or option, then
the swap is valued at whatever price Enron puts on it?

If this is correct, LD's position would be that if, at the time at which
the parties are negotiating the terms of the Transaction, they feel that
the relevant commodity is one for which the market is not liquid, so that
reference to market or index prices does not result in an appropriate
valuation, then at that time the parties should agree to a mark to model
formula which should be included in the Confirmation and that formula
should be deemed to be a material term of the transaction which without
agreement to, no Transaction should be deemed to have been entered into.

Regards
Mary Ellen Bell
Louis Dreyfus Contract Administration
tel: (203) 761-8108
fax: (203) 761-8182
e-mail: bellme@louisdreyfus.com
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