Kay,

What do you think?  Are we prohibited from doing this?

Stuart----- Forwarded by Stuart Zisman/HOU/ECT on 02/06/2001 11:04 AM -----

	Eric Booth@ENRON_DEVELOPMENT
	02/02/2001 10:19 AM

		 To: Stuart Zisman@ECT, Billy Lemmons@ENRON, James I Ducote@ECT
		 cc: Jeffrey M Keenan@ECT
		 Subject: Austin - LM6000 Scope of supply

This past Wednesday during our weekly site visit, I explained to Austin
Energy that I could not give them the whole LM6000 contract for
confidentiality reasons, especially with respect to the commercial
sections.   They were okay with that, but did make one last (and polite)
request for a list of the scope items that they would be getting.  What I
would propose to send is Exhibit B and B-1 from the contract (see attached).
Exhibit B is a simple bulleted scope of supply list.  Exhibit B-1 is a simple
spec that we wrote for the turbine which is itself a glorified scope document.

Let me know if this is something that I can forward to Austin Energy.  If the
attached document still gives someone heartburn, I'll end it here and
politely decline with Austin Energy.

Thanks,
Eric


In case Linda didn't forward.

Best,
Jeff

-----Original Message-----
From: Noske, Linda J.
Sent: Wed 10/10/2001 3:03 PM
To: Dasovich, Jeff
Cc:
Subject: Sue Mara's Notes

        This is from Sue's draft she gave me, Jim will get a copy in the a.m.

        <<California Issues.doc>>


Attached is the first draft of our brief in opposition to the motion for
preliminary injunction.  It needs to be filed on Friday.  Please send me any
comments you have and I will forward on to Quinn Emanuel.

Leasa--this should have been faxed to VTS already, but you may want to check
and fax if it has not been.

Carol--please fax to Marty

MDS


Debra, Dan, and Ellen -

Deal QZ2383.1, with Weirton Steel Corporation, is approved by Credit, subject
to the inclusion in the confirm of specific credit provisions.

Debra:  This is the deal that we discussed late last week, where you had
worked up an ENFOLIO FIRM CONFIRMATION (attached below) with the credit terms
that I had provided.  Jennifer Shipos informs me that the estimated price per
Mmbtu is $6.13 for inclusion in the commercial terms section of the ENFOLIO
confirmation (actual pricing is NYMEX plus $0.31 basis).

Ellen:  Please send out the confirm ONLY upon receipt of the ENFOLIO
documents from Debra.  The documents below are simply drafts, and can not be
sent with the confirm.  It is imperative that the credit provisions are
included in this confirmation.  Once you have received these from Debra,
please send out confirm at your earliest convenience.

IF ANYONE SHOULD HAVE ANY QUESTONS ABOUT THIS CONFIRMATION, PLEASE CALL ME AT
EXTENSION 53923.

Thanks,

Jay


Celeste,

We can use this guy  as a help for Enron Broad band  Svc's.
We are getting many projects in this area.

Vince
---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 01/24/2000
07:38 AM ---------------------------

Konstantin Mardanov <mardanov@physics.utexas.edu> on 01/24/2000 12:06:42 AM
To: Vince J Kaminski/HOU/ECT@ECT
cc:
Subject: Re: resume from a neural networks zealot

On Wed, 20 Oct 1999, Vince J Kaminski wrote:
>Konstantin,
>
>I am sending your resume to the Analyst / Associate program
>with the recommendation to accept you as an intern in my group.
>
>Vince

Dear Dr.Kaminski,

it has been a long time since I contacted you so I was wondering if
my resume had been considered for an internship in your group.

I will appreciate it very much if you let me know when I should expect
to learn about a decision on the issue.

Thank you for you time.

Sincerely,

Konstantin.

--------------------------------------------------------------
     Konstantin Mardanov

 Department of Physics,        |    5012 Duval St, Apt.206
 University of Texas @ Austin, |    Austin, TX 78751, U.S.A.
 RLM 7.316, Austin, TX 78712   |
 U.S.A.         |    phone: 001 (512)374-1097
---------------------------------------------------------------
 e-mail: mardanov@physics.utexas.edu
 URL(almost obsolete): http://www.niif.spb.su/~mardanov
--------------------------------------


As I look back on the ten months that I have been the Business Controller for EIM and challenged to build the mid and back office infrastructure, the most significant accomplishments are:

Systems - Tactical systems have been implemented to bridge the business while strategic systems are developed.
	Financial and physical confirmations (with the exception of Lumber) have been predominantly automated.
	Financial settlements has been automated.
	Implemented modified versions of LISA to handle physical movements and settlements.  Bridges have been built to SAP and Credit Aggregation systems.

People - Ten months ago, the mid and back office had three employees, with the remaining efforts supported by Global Markets.  Today, we have an enthusiastic, energetic team of 41 employees.  The team includes our London office also.  We continue to recruit for additional positions.

Processes and Controls - Many processes and controls have been developed to ensure accurate and timely reporting of P&L and positions, confirmations and settlements.  Some of these tools include:
Pulp and Paper Deal Ticket (Access Database) - Ten months ago, deal tickets were generated through an Excel template and no master copy or controls were in place.  Today, traders, Risk, Confirms, Settlements, Credit, Logistics, etc. can view the deal tickets in a controlled and timely manner.
LISA/TAGG Reconciliation (Access Database) - When the onset of physical business and the implementation of LISA systems, physical transactions for all commodities (except lumber) are entered into 2 systems - LISA and TAGG.  This tool provides a reconciliation tool that allows the Risk system and the logistics/settlements systems to stay in sync.
Trader Training Tools - Two different presentations have been developed and presented to the EIM trading community to help the traders (mostly new to Enron) understand the roles and responsibilities of traders, segregation of duties and the processes within Commercial Support functions such as Credit, Tax, Legal, Operations, Logistics, etc.

Sally, I hope this will give the flavor of the focused efforts.  Additionally, as I have had a few hours to reflect on our conversation, I would like to follow-up with an additional meeting.  I need just a bit more clarity around the EIM role, but more so, I want to move forward to discuss the new role and in your view, how I can still accomplish the successes that coincide with my personal goals.

If you have time tomorrow afternonn, I would really appreciate 30 minutes.

Thanks for your support.  It means alot to me.

Brenda


Jose,

Thank you for your interest in Enron.
I don't know at this point if we are going to offer any
internships in the summer of 2002.

My assistant, Shirley Crenshaw,  will send you the reprints of my publications.

Vince

 -----Original Message-----
From: 	"Jose E. Figueroa-Lopez" <figueroa@math.gatech.edu>@ENRON
Sent:	Wednesday, November 14, 2001 11:41 AM
To:	vkamins@enron.com
Subject:

	Dear Dr. Kamiski,

        I am a student of the master in Quantitative Computational Finance
in Georgia Tech and also a Ph.D. student of the school of Mathematics. I
had the opportunity of attending the talk you gave in Georgia Tech two
weeks ago. I found the field and your work extremely interesting and
exciting. Since I am finishing the master degree in QCF this Fall and I
am in the initial  stages of my dissertation research, I am really looking
forward to having exposure to some real problems that the industry has
related to price modeling and pricing of financial instruments. I believe
that such a exposure will serve to motivate my dissertation and research.

        I firmly believe that my mathematical background is particularly
suitable for the problems you explained in your talks. I have another
master degree in Statistics and probability, in which I had exposure to
practical and theoretical aspects of statistics and probability. As part
of my master dissertation, I had the opportunity to study in depth
Self-similar Stochastic Processes and Levy Processes with particular
emphasis on papers of Taqqu, Samorodnitsky, Sato, Mandelbrot, and
Bandorff-Nielsen. Also, I have extensive experience in C and Java
programming as well as standard statistical and mathematical packages like
MatLab, Maple, S-plus, Minitab, and Statgraphics. You can read my
resume attached to the e-mail.

        I am really interested in working on an internship next Spring
and/or Summer in your group or maybe to work individually with you in
reading sections and research projects related to the energetic field.

	One last thing, I wonder if you can provide me with a copy of your
slices or some bibliography.

	Thanks for your time and I expect to hear from you.

	Sincerely yours,

	Jose E. Figueroa-Lopez

 - Fall01Resume3.pdf << File: Fall01Resume3.pdf >>


My new employee who will be working with me on global standards for
operations for all trading/origination locations started with Enron
yesterday.  Her name is Shona Wilson, and I do not know her extension.  She
was in orientation yesterday, and I will be meeting with her today from 9:30
to 10:30 to discuss her initial assignments, of which working with India is
one.   I will have her contact you later today.  Although she is new to
Enron, she has had extensive experience with Price Waterhouse Coopers in
internal audit, controls and process redesign for trading firms, both in the
US and in Europe.  She will work with other seasoned professionals on my team
to set up the infrastructure that is needed in India.   --Sally

To: Wanda Curry/HOU/ECT@ECT
cc: Sally Beck/HOU/ECT@ECT, Bill Gathmann/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject: Re: Enron Trading

Wanda/Sally,

Can I talk to the person sometime today or tomorrow?. Please provide me with
the name and tel no. Thanks and Regards.

Milind

Wanda Curry@ECT
19-05-2000 08:49 PM
To: Milind Laad/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Sally Beck/HOU/ECT@ECT

Subject: Re: Enron Trading

I had a chance to review your presentation.  Bill and I have been working
with Sally Beck, Global Energy Ops and she will identify a  resource to help
insure all internal controls (specific to  trading activities) are in place
in India.   As I understand the plan for coal, India will function mostly as
an origination unit  with the London office being responsible for supplying
the coal.  Therefore, the net Enron position will probably be carried in the
London books.   However, risk books will still be required in India to
determine the net  MTM  for the 3rd party sales commitments in India.  These
books should include both the intercompany purchase from London  and the 3rd
party sales.  The commercial group in India  will be responsible for local
curves  (location (basis) specific - usually transportation costs), and
energy operations (this will probably be you  initially until the trading
activity has grown) will be responsible for the deal capture process
(including contract administration), a settlement process and risk management
administration (daily valuation and reporting of risk books).   Accounting
will be responsible for the reconciliation of risk books to the general
ledger and financials.    There will also be a logistics process.   The
following questions need to be addressed:

  With the increased  coal volumes will an increase in trading limits be
required?
      My understanding that the London coal group will be responsible for
determining this and working with Ted Murphy to change the
      policy, if necessary.
  What trading activities will be performed in India vs. London?
      The answer to this is needed to determine the control infrastructure
required for the India office.

Sally's employee starts on Monday,   I will let you know who she is and
arrange a call.    You can rest assured, that although this may seen
complicated (and it is), Sally's Energy Ops team will be able to hold your
hand all the way through this process.    It will be critical that we
demonstrate the control infrastructure is in place, before we can obtain
sigh-off for trading from Rick Buy.

Looking forward to helping you get this ready for a July 1 start date.

Thanks,
Wanda Curry

To: Wanda Curry@ECT
cc: Bill Gathmann/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject: Enron Trading

Wanda,

It was nice talking to you on the conference call. Have you had a chance to
review my presentation?. Your comments would be extremely helpful to me. When
we setup the Risk/Credit/Accnt/MIS/Internal Control function, I want to make
sure we do it RIGHT the FIRST time, keeping in mind that there is always room
for improvement later.

In addition, I would like to discuss with you certain thought I have on the
accounting, budgeting,internal controls and internal audit areas in EIPL. Do
you plan to travel to India in the near future. Please let me know.

Thanks and Regards.


I talked to Peggy and her messages seem to be the same as ours.  Call if you
want to discuss.


EPSA's california story.
---------------------- Forwarded by Richard Shapiro/NA/Enron on 01/26/2001
03:44 PM ---------------------------

"Illane lewis" <ILewis@epsa.org> on 01/26/2001 03:41:14 PM
To: <rshapiro@enron.com>
cc:

Subject:

 - Updated California The Real Story 1-01.doc


So am I.  I heard through the grapevine that we will be heading out to
Ditka's for your birthday on Thursday?  I also heard rumors that they may be
closing that casino down.  I hope it is not before Jazz Fest.
PL


got it, thanks.

-----Original Message-----
From: Muschar, Daniel
Sent: Thursday, December 27, 2001 6:15 AM
To: Saibi, Eric
Cc: Tamma, Ramanarao
Subject: RE: request

I have one at my desk at 05563...Whoever wants it can come get it.

Later,
Daniel

-----Original Message-----
From: Saibi, Eric
Sent: Friday, December 21, 2001 11:14 AM
To: Muschar, Daniel
Subject: RE: request

Hey there,

I'd like to get that cable if you are still around.  Call me on my cell if you are 713-594-2776.  Thanks.  Otherwise I'll just get it after the Xmas.  Thanks and have a nice holiday.

Eric

-----Original Message-----
From: Muschar, Daniel
Sent: Thursday, December 20, 2001 12:33 PM
To: Tamma, Ramanarao
Cc: Saibi, Eric
Subject: RE: request

I have the cable now if u r still here.

Daniel A. Muschar
Trader Support Group
--------------------------
Sent from my BlackBerry Wireless Handheld

-----Original Message-----
From: Tamma, Ramanarao <Rao.Tamma@ENRON.com>
To: Muschar, Daniel <Daniel.Muschar@ENRON.com>
CC: Saibi, Eric <Eric.Saibi@ENRON.com>
Sent: Thu Dec 20 12:20:05 2001
Subject: RE: request

can u please give it to Eric Saibi. I will be out of office for the rest of the week.
-Rao

-----Original Message-----
From: Tamma, Ramanarao
Sent: Thu 12/20/2001 9:28 AM
To: Muschar, Daniel
Cc:
Subject: request

Daniel,
   need a printer cable.
thanks
-Rao

Ramanarao Tamma
Sr. Specialist
Market Intelligence
X 33066


The attached file has July 2001 and September 2001 analyzed.

I have compared the TW Balance Report to Actuals for July 2001 (see attached spreadsheet) and feel that the Fuel Retention numbers are good.  The Fuel Burned numbers are generally too low due to missing 3-days of actuals and some fuel meters are inputted only once a month and will be missing from the balance report.  However, when you use Ken's report just estimate the fuel numbers 25% higher and you will be OK.

The remaining volumes (Retention less Fuel less Sales) will equal imbalances and UAF.  Ken's report (area under construction) needs work to solve the imbalance question and we can discuss this next week.  He will be in Houston Monday and Tuesday.

Also, I want to make one thing clear.  Sales go to the bottom line, however if your selling imbalance gas received from a customer or line pack you will have an expense offset that also goes to the bottom line.   Conversely, if you are repaying (giving) gas to a customer you will have an expense credit that goes to the bottom line.  Over-retained gas (Retention less Fuel less UAF) is the only bottom line amount.  You can sell the gas outright or sell it to the customers imbalance or linepack.  If you sell it to linepack or volume valued imbalances, you will have taken on commodity risk.  We can discuss TW's risk profile next week.

Dan

 -----Original Message-----
From: 	Powers, Ken
Sent:	Tuesday, July 31, 2001 2:00 PM
To:	Doll, Jeanette; Donoho, Lindy; Fancler, Dan; Geaccone, Tracy; Harris, Steven; Moore, Jan; Schoolcraft, Darrell; Watson, Kimberly
Subject:	TW Daily Balance Report

Please see attached.

Call me if you have any questions.

Ken Powers
(402) 398-7065


I will be out on vacation next week while my kids are on spring break.  I
will make the next meeting.  --Sally

From: Michele Beffer/ENRON@enronXgate on 03/08/2001 03:53 PM
To: Buddy Aiken/LON/ECT@ECT, Melissa Allen/LON/ECT@ECT, Sally
Beck/HOU/ECT@ECT, Kent Castleman/ENRON@enronXgate, Mary
Cilia/ENRON@enronXgate, Wes Colwell/ENRON@enronXgate, Stephen H
Douglas/ENRON@enronXgate, Bob M Hall/NA/Enron@Enron, Brenda F
Herod/ENRON@enronXgate, Georgeanne Hodges/HOU/ECT@ECT, Drew
Kanellopoulos/ENRON@enronXgate, Roger Ondreko/ENRON@enronXgate, Michael K
Patrick/ENRON@enronXgate, Brent A Price/ENRON@enronXgate, Alan Quaintance
Jr./ENRON@enronXgate, Kerry Roper/ENRON@enronXgate, Tammy R
Shepperd/ENRON@enronXgate, Cris Sherman/ENRON@enronXgate, Jeffrey E
Sommers/ENRON@enronXgate
cc: Heather Choate/HOU/ECT@ECT, Yvette G Connevey/ENRON@enronXgate, Virginia
Dennard/ENRON@enronXgate, Paula Forsyth/ENRON@enronXgate, Alisha
Guerrero/ENRON@enronXgate, Renee Ingram/HOU/ECT@ECT, Diane
Latson/ENRON@enronXgate, Sonnia Reyes/ENRON@enronXgate, Grace
Taylor/ENRON@enronXgate, Patti Thompson/HOU/ECT@ECT, Shirley
Tijerina/ENRON@enronXgate, Chantelle Villanueva/ENRON@enronXgate, Kim
Weldon/ENRON@enronXgate
Subject: Meeting Reminder

Just a reminder that the next Wholesale Deal Meeting will be Monday, March
12th from 1:30 - 3:00.  This meeting will be held in EB3321.

Michele Beffer
Transaction Support
713-345-7681


Ava, that is fine.  Just have some one backing you up and put a note to all the teams.  Thanks. Lynn

 -----Original Message-----
From: 	Garcia, Ava
Sent:	Thursday, October 25, 2001 5:06 PM
To:	Blair, Lynn
Subject:	Request for Vacation

Lynn, I am moving and would like to take Tuesday October 30th off would that be okay??

Thanks,
Ava


Here are the answers to your latest questions.  Again, please give us a call
if you have any more questions.  Thanks!
Ben Rogers


Mark,

Welcome back!

I am wondering if you could lend a hand on a few areas on the legal side of
EnronOnline:

1) GTC Cross reference (see prior email)
2) Product Long Descriptions - these are now available in the same format as
the customer will see - i.e. all put together by the system, as opposed to
individual sentences in a spreadsheet. The traders should have set up all of
the products which were required for the simulation (I haven't confirmed
this). These products would be a good place to start and should provide a
representative sample for the lawyers to look at. There are a few changes
coming, as requested by Louise Hansen, Stacy Dickson and Janice Moore which I
have not yet incorporated (but hope to within the next 2 days or so) -
otherwise, the other products should be OK as they contain text derived from
the spreadsheets which the lawyers have approved.

It would be helpful if you could organize for each of the lawyers to access
the Product Manager, so they can see the long descriptions for the Products.
Someone in the Product Control Group should be able to show you how to access
the long descriptions in the Product Manager

3) Emissions - Are you the emissions guy? I haven't actually discussed these
with anyone - not sure if the lawyer list I have includes the person who
should be looking after this?

  Mark Taylor
  Leslie Hansen
  Jeff Hodge
  Janice Moore
  Alan Aronowitz
  Harry Collins
  Stacy Dickson

4) I still do not have a warm and fuzzy feeling that the GTC variables have
been properly cross-referenced to the spreadsheets, and that the two work
together to form a cohesive whole. I might just be paranoid, but I think this
area needs closer examination. Perhaps you could spot-check a couple of GTC's
against the products and see what you think?

Thanks for your help

Dave


Enron Fights To Find Near-Term Sellers,But Still Trading
Dow Jones Energy Service, 11/27/01
USA: UPDATE 3-Dynegy says in talks on Enron merger structure.
Reuters English News Service, 11/27/01
RPT Dynegy confirms in talks on structure of Enron merger deal
AFX News, 11/27/01
Merger Traders Wary Even If Enron, Dynegy Cut New Terms
Dow Jones News Service, 11/27/01
Dynegy confirms in talks on structure of Enron merger deal
AFX News, 11/27/01
STOCKWATCH Enron slightly higher on hopes for new deal price
AFX News, 11/27/01
IN THE MONEY: Hedge Funds Say Yes To New Enron Terms
Dow Jones News Service, 11/27/01
Dynegy Confirms Talks On Enron Deal Structure - Source
Dow Jones News Service, 11/27/01
USA: Enron shares down despite talk of new Dynegy deal.
Reuters English News Service, 11/27/01
Enron Credit Rating to Remain Unchanged for Today, Moody's Says
Bloomberg, 11/27/01

Enron Turned Down by Investors Alwaleed, Blackstone, Carlyle
Bloomberg, 11/27/01

Liberty Funds Analyst Paik Comments on Dynegy and Enron Talks
Bloomberg, 11/27/01

A.G. Edwards Analyst Heim Comments on Dynegy and Enron Talks
Bloomberg, 11/27/01

Commerzbank Analyst Meade Comments on Dynegy's Talks With Enron
Bloomberg, 11/27/01

ENRON SHARES RECOVER FROM A.M. SLUMP
CBS.MarketWatch.com, 11/27/01

Enron In Free Fall
Forbes.com

Enron Fights To Find Near-Term Sellers,But Still Trading
By Mark Golden
Of DOW JONES NEWSWIRES

11/27/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Enron Corp. (ENE) continued to struggle Tuesday to find willing sellers of near-term gas and power in North America, but the one-time market maker was still able to trade on a limited basis, according to market sources.
"It's not getting any better," said one major energy broker.
Many energy trading companies aren't selling to Enron and are only buying from it near-term. These include Aquila Inc. (ILA), Mirant (MIR), Royal Dutch/Shell Group (RD) subsidiary Coral Energy, Sempra Energy (SRE), and Morgan Stanley Dean Witter's energy trading subsidiary, said the broker. The broker estimated Enron's over-the-counter trading volume to be about 25% of what it was a month ago. Companies are willing to buy from Enron in the spot gas and power markets, because taking delivery on commodity and paying for it a month later poses no credit risk for the buyer.
Some other companies, like Dynegy Inc. (DYN), Duke Energy Corp. (DUK) and BP PLC. (BP), continue to trade with Enron fairly freely, the broker said. Dynegy has reached an agreement to acquire Enron, though the terms of that deal are being renegotiated. The trading subsidiaries of troubled California utility-holding companies PG&E Corp. (PCG) and Edison International (EIX) also are trading with Enron.
The third and largest group of companies are trading with Enron on a very limited basis to reduce exposure by taking off-setting trades against deals done long ago. These include El Paso Corp. (EPG), Reliant Resources (RRI), Tractebel SA's (B.TRB) U.S. trading unit and regulated utilities, the broker said.
Several energy traders said that both power and gas were being sold at prices lower than Enron was offering.
"They've been cut off from so many people," said one electricity trader.
Enron Says Just Slight Reduction In Transactions

An Enron spokesman said he has seen a slight reduction in transactions but not to 25% of the one-month-ago level.
The notional value of Enron's 30-day rolling average of transactions is $2.8 billion, said Enron spokesman Eric Thode. Thode declined to give volume data for Tuesday or Monday, although the company was giving daily information two weeks ago.
"We're not doing daily information. We're only speaking in terms of 30-day rolling averages. ... It's not fair to speak in terms of daily because of daily volatility," Thode said.
Traders and brokers said they hope Dynegy will offer some kind of guarantee to Enron's trading to restore confidence. But, after Enron's ability to transact took a severe turn for the worse Nov. 20, Dynegy said that the companies must continue to operate independently until their merger is approved and completed.
Energy companies began shying away from Enron over the past month, as concerns about its finances precipitated a 75% drop in its stock price and left its bonds trading at levels typically associated with junk-rated debt.
But Enron saw its ability to trade seriously damaged last week following the late release of its quarterly financial report with the U.S. Securities Exchange Commission. For the first time since Enron's troubles began a month ago, energy companies stopped selling to Enron in the spot markets for fear that Enron might not be able to pay its bills as soon as next month based on the quarterly filing.
Moody's Investors Service and Standard & Poor's all rate Enron one notch above speculative grade. Moody's has Enron's ratings on review for a downgrade, and S&P has Enron on negative credit watch. Fitch calls Enron's credit rating "evolving." Enron's ability to do business in the energy markets depends on its maintaining investment-grade ratings.
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com
(John Edmiston in Houston and Jon Kamp in Chicago also contributed to this article.)

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA: UPDATE 3-Dynegy says in talks on Enron merger structure.
By C. Bryson Hull

11/27/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Nov 27 (Reuters) - Energy trader Dynegy Inc. confirmed on Tuesday it was in talks with floundering rival Enron Corp. over their proposed merger, as sources familiar with the negotiations indicated the final buyout price may be slashed some 40 percent.
"I can confirm that we are in discussions with the parties involved in the transaction related to the deal," Dynegy spokesman John Sousa told Reuters. He declined to give further details.
Dynegy had planned to buy its Houston rival for $9 billion in stock and is currently in a "due diligence" examination of Enron's complex financial books that began before the Thanksgiving holiday last Thursday.
The buyout offer, finalized Nov. 9, would have had Dynegy paying about $10.41 for each share of Enron, but Enron's shares have since cratered to near $4, stoking investor fears the merger will not go through as planned - if at all.
The stock exchange ratio under discussion could fall from the originally proposed valuation of 0.2685 of each Dynegy share for each Enron share to around 0.15 instead, sources familiar with the matter told Reuters. Enron is willing to accept the lower valuation, given the pressure on its stock price, the sources said.
Enron's shares bounced on Dynegy's confirmation of the restructuring talks, trading up 22 cents at $4.23 in late afternoon action on the New York Stock Exchange. The shares had dipped as low as $3.84 in late-morning dealings and as high $4.49. Dynegy's shares gained 4.7 percent or $1.83 to move to $41.08 on the NYSE.
Also on the table were negotiations to extend maturation of Enron's debt past the close of the merger, expected in the third quarter of 2002. The sources said an announcement was possible on a new infusion of at least $500 million in cash, which Enron has said it was seeking.
There also seemed to be an accord over who gets first crack at the Northern Natural Gas Pipeline, which would be Dynegy's consolation prize if the deal fell apart, a source said. Published reports have said that investment banks J.P. Morgan and Salomon Smith Barney had already accepted the pipeline as collateral in other loans, and may dispute Dynegy's ownership if the deal breaks up.
"The pipeline is far more valuable than what has already been collateralized. There's a solid earnings stream from that thing," said one source familiar with the discussions.
ONE TRADING UNIT SHUT DOWN
Two sources confirmed to Reuters that Enron's equity trading unit has been told it is being closed and that the roughly 60 employees there are being laid off. Enron was not immediately available for comment.
Those layoffs, part of broader job cuts expected as part of the Dynegy buyout, point to an acute problem for Enron - the loss of volume in its premier trading franchise. Enron's trading partners have been cutting back transactions with North America's largest energy trader because of credit concerns.
"This business is hugely dependent on volumes and volume growth. It is the principal reason that Dynegy is making the deal. If it's worth a lot less then Enron is worth less. It's vital to stop the bleeding in its core trading and marketing business," said Commerzbank analyst Andre Meade.
But as Enron's stock continued to lose value, down over 50 percent since Dynegy's initial bid, it seemed likely the purchase price would fall as well. Enron has seen its market capitalization drop to around $3 billion, from $60 billion at the start of 2001. (additional reporting by Jeff Goldfarb, Janet McGurty and Jonathan Stempel in New York).

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
RPT Dynegy confirms in talks on structure of Enron merger deal

11/27/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
(Repeating to clarify lead)
NEW YORK (AFX0 - Dynegy Inc confirmed it is in talks with Enron Corp on the terms of their two week-old acquisition deal.
"I can confirm that we are in discussions with the parties involved in the transaction related to the structure of a deal," Dynegy spokesman Steve Stengel said.
Enron declined to comment.
Citing people familiar with the matter, the Wall Street Journal reported today that Enron is in advanced talks with Dynegy to cut the price of the all-stock transaction by more than 40 pct to about 5 bln usd.
Enron is also trying to extend the maturity dates of some of its borrowings to stem a growing liquidity crisis, the Wall Street Journal said.
lwl/gc

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Merger Traders Wary Even If Enron, Dynegy Cut New Terms
By Christina Cheddar
Of DOW JONES NEWSWIRES

11/27/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Even if Dynegy Inc. (DYN) revises the terms of its acquisition of Enron Corp. (ENE), some takeover traders say the stock remains too risky.
Earlier Tuesday, a Dynegy spokesman confirmed the company was in talks to restructure the Enron acquisition. Separately, a person familiar with the negotiations said the talks are centered on creating a package that includes a lower exchange ratio for Enron shareholders, a provision for additional funding for Enron, and the refinancing of Enron's existing debt.
Even with the boost Enron shares have received from the reports, they continue to trade at a sharp discount to the original deal's value. Enron shares recently traded at $4.30, up 29 cents, or 7.2%, while Dynegy shares changed hands at $41.50, up $2.25, or 5.8%.
Under the original terms of the deal, Enron shareholders will receive 0.2685 of a Dynegy for each share outstanding, or $9.47 billion. At current trading levels, Enron shares are at a 61% discount to the offer price.
According to The Wall Street Journal, Dynegy and Enron are contemplating an exchange ratio of less than 0.15 of a Dynegy share, or about $5.29 billion.
The rejiggered deal is an attempt to restore confidence in Enron's ability to carry on its core energy marketing and trading business as the deal moves toward completion, the person said.
As the market waits for more details from the two companies, some say it will take more than a revised offer to provide takeover traders, also known as arbitrageurs, with enough confidence to play the deal in the typical fashion.
Often arbitrageurs bet on pending mergers by selling short shares of the acquiring company and buying shares of the target. In this way, the traders hope to profit as the target's share price moves toward the buyer's offer.
But according to some traders, there is too much risk, even for those accustomed to uncertainty, to play the Dynegy-Enron deal in this way.
Several traders said they were still wary that the deal could collapse and potentially push Enron into bankruptcy.
Enron's fortunes took a sharp turn for the worst after investors began to realize the company liberally used accounting loopholes to move its debts into off-balance-sheet financing vehicles, including partnerships run by its former chief financial officer, Andrew Fastow.
"There's nothing like accounting to scare people," said one trader, who said there is still a perception in the market that there is more bad news yet to come from Enron.
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Dynegy confirms in talks on structure of Enron merger deal

11/27/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
NEW YORK (AFX0 - Dynegy Inc confirmed it is in talks with Enron Corp to renegotiate the terms of a deal with Dynegy Inc in an attempt to save their two week-old acquisition deal.
"I can confirm that we are in discussions with the parties involved in the transaction related to the structure of a deal," Dynegy spokesman Steve Stengel said.
Enron, meanwhile, declined to comment on the report.
Citing people familiar with the matter, the Wall Street Journal reported that Enron Corp is in advanced talks with Dynegy to cut the price of the all-stock transaction by more than 40 pct to about 5 bln usd.
Enron is also trying to extend the maturity dates of some of its borrowings to stem a growing liquidity crisis, the Wall Street Journal said.
lwl/gc

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
STOCKWATCH Enron slightly higher on hopes for new deal price

11/27/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
NEW YORK (AFX) - Shares of Enron Corp were slightly higher in midsession trade on reports that the company is trying to renegotiate the terms of a deal with Dynegy Inc, by cutting the price of the all-stock transaction to 5 bln usd, or 40 pct, from 9 bln usd, dealers said.
At 12.19 pm, amid broad declines in the market, Enron shares were trading up 5 cents at 4.04 usd. Dynegy was up 1.26 usd, or 3.26 pct, at 40.51.
The DJIA was down 111.48 points at 9,871.28. The S&P 500 was down 10.40 points at 1,147.02. The Nasdaq composite was down 20.25 points at 1,920.98.
Earlier, the Wall Street Journal said Enron was in advanced talks with Dynegy in an attempt to salvage their two week-old acquisition deal. The companies are discussing a new price for the all-paper deal, following the sharp fall in Enron's share price of the past few weeks.
Enron had hoped to finalise the deal and make an announcement yesterday that would calm investors -- the shares are trading at a small fraction of their record high last year of 87.50 usd.
As of today, however, the revised deal still has not been formalised.
The current agreement with Dynegy contains a "material adverse change" clause, which could be invoked to call the deal off.
As part of its due diligence, Dynegy is examining details of Enron's filing with the Securities and Exchange Commission last week, which reportedly contained information it had not received previously.
"Enron is a black hole, and I don't know how deep the bottom is," said Fadel Gheit an analyst at Fahnestock & Co.
Only four weeks ago, Enron's stock was trading at the 8 usd mark, Gheit said, noting that if the Dynegy had done their homework the stock would not have continued to collapse.
"The market sees this and somebody has to figure out the potential exposure, it could be several billion dollars," said Gheit.
If the deal is to go through then the two companies must arrive at a new stock-exchange ratio, said Gheit. Under the current acquisition agreement, Dynegy would exchange 0.2685 share for each Enron share tendered.
According to the Wall Street Journal, the new ratio is expected to be less than 0.15 share of Dynegy stock for every share of Enron stock, which would value Enron at less than 6 usd a share, or about 5 bln usd.
blms/cl/gc

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
IN THE MONEY: Hedge Funds Say Yes To New Enron Terms
By Carol S. Remond

11/27/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
A Dow Jones Newswires Column

NEW YORK -(Dow Jones)- News that Enron Corp. (ENE) and would-be suitor and savior Dynegy Inc. (DYN) are working to renegotiate their merger agreement has done little to assuage market jitters about Enron's fate.
And so far, even professional arbitrageurs, who normally thrive on placing bets on whether a merger is going to go through, continue for the most part to stay clear of Enron's stock and bonds because of the uncertainty surrounding the once mighty energy trader.
Still, reports that the equity swap ratio offered by Dynegy could be revised down to below 0.15 from 0.2685, has some hedge funds, often willing to take more risks, looking to place trades on the deal.
"We're trying to figure out a good play," said a trader at a New York hedge fund.
So far, bets under consideration seem to be those that would include a combination of stock and debt trading, somehow hedging a short position on Enron's shares with a long position in some of its bonds.
"People that are playing the debt are definitely playing the stock against it," a hedge fund manager at another fund said. This manager added, "We're still trying to evaluate different risk/reward scenario on the debt and equity sides."
Investors that sell stock short borrow shares in the hopes of replacing them later by purchasing them at a lower price.
Arbitrageurs typically sell short shares of the acquirer, while taking long positions in the stock of the target company. But there is nothing typical about Enron's financial woes and the rescue efforts launched by Dynegy and large banks like J.P. Morgan Chase & Co. and Citigroup Inc.
Traders reported increased activity in the still mostly illiquid Enron debt market. "Some bids are coming in, especially on the lower priced bonds," said a trader at a large New York investment bank that makes a market in Enron's bonds.
Enron bonds, which had fallen in value in recent weeks, gained five to seven points early Tuesday as investors continue to await confirmation from Enron and Dynegy that their merger deal remains on track, albeit at a lower price. Enron's 6.4% bonds due 2004 were recently trading at about 55 cents on the dollar, up from 48 cents Monday.
Under the original terms of the deal, Enron holders would have gotten 0.2685 of Dynegy shares for each of their Enron shares. Quoting people close to the discussions, The Wall Street Journal reported Tuesday that the new ratio is expected to be less than 0.15 share of Dynegy stock for every share of Enron stock. That lower exchange was also mentioned in a Dow Jones Newswires story last Friday. At current prices a 0.15 exchange ratio would value Enron at less than $6 a share.
Essentially this new value, if true, means that it has now become easier for hedge funds and other risk takers to play the merger odds.
When a hedge fund shorting Enron stock at $4 a share risked losing more than $6 if the merger went through at the 0.2685 ratio, it now stands to lose only $2 a share (based on the $6 value of Enron stock under the new 0.15 ratio). At the same time it has become much easier to hedge that loss potential by going long on Enron bonds. If the merger doesn't happen, Enron is seen by many as heading for bankruptcy with an ultimate share value of 0. That means that hedge funds shorting Enron at $4 stand to benefit by that amount.
Hedge fund managers and traders said that current thinking puts the value of Enron bonds at about 20 cents on the dollar if the merger fails and about 80 cents on the dollar if it goes through. Meanwhile, the value of Enron stock is capped at about $6 a share if the merger goes through with a new conversion ratio of 0.15.
"A lot of the guys are still very skeptical," said a bond trader at a New York bank. "But this is really making the hedge trade easier and we've seen more customers short the stock and buy the bonds."
Still, this type of bets isn't for the faint of heart, and most investors are likely to wait for more news before taking a position.
"We're nibbling a little bit at the bonds right now. But the situation is so volatile that it's difficult to be aggressive," the manager of a large New York hedge fund said.
Carol S. Remond; 201-938-2074; Dow Jones Newswires
carol.remond@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Dynegy Confirms Talks On Enron Deal Structure - Source
By Christina Cheddar
Of DOW JONES NEWSWIRES

11/27/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Dynegy Inc. (DYN) confirmed the company is in talks with a number of parties regarding the structure of its transaction with Enron Corp. (ENE).
"I can confirm that we are in discussions with the parties involved in the transaction related to the structure of the deal," said John Sousa. "I can't elaborate any further at this time."
An Enron official wasn't immediately to comment.

Earlier Tuesday, a report in The Wall Street Journal quoted people familiar with the matter who said Enron and Dynegy were in advanced discussions to cut the price of the all-stock transaction by more than 40% to about $5 billion. Sousa, the Dynegy spokesman, didn't comment on the newspaper report.
Dynegy shares recently traded at $40, up 75 cents, or 1.9%, while Enron shares changed hands at $3.94, down 7 cents, or 1.7%.
Under the original terms of the transaction, Enron shareholders are to receive 0.2685 of a Dynegy share, or $10.78, for each share outstanding, or about $9.14 billion, based on Dynegy's recent stock price.
According to the Journal report, the new terms could be below 0.15 of a Dynegy share.
The deal is critical for Enron, which also simultaneously carrying out talks to receive between $500 million to $1 billion in additional funding to support its operations, while carrying on negotiations to restructure its debt, which totals about $13 billion.
While Dynegy has already provided Enron with a cash infusion, it is uncertain how long Enron's current funds will allow it to remain solvent.
Meanwhile, a third employee lawsuit has been filed against Enron over lost 401(k) retirement savings due to the recent collapse of Enron's stock, which has declined more than 90% in the trailing 12 months. The suit claims Enron "locked down" the plan, which prevented employees from being able to sell the shares, and seeks $850 million for plan losses.
Although the other recently filed employee suits didn't disclose the amount of compensation the plaintiffs are seeking, it is possible the suits seek a similar level of damages, a CreditSights report said.
If this is true, the CreditSights report said, it is possible the clause that allows Dynegy to walk away from the deal if the liabilities from "pending"' or "threatened" litigation may exceed $3.5 billion may be invoked.
In addition, to the employee lawsuits, more than a dozen shareholder suits have been filed against Enron.
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com

The discussions between Enron and Dynegy aren't merely focused on revising the consideration Dynegy will pay. They are also aimed at providing Enron with additional funding and at restructuring its debt, said a person familiar with the negotiations.
The moves are aimed at restoring confidence in Enron and relieving "the perceived liquidity crisis," the source said.
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA: Enron shares down despite talk of new Dynegy deal.

11/27/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Nov 27 (Reuters) - Shares of financially troubled energy trading giant Enron Corp. slipped back into the red on Tuesday after gaining in opening trade following news of a new rescue deal from Dynegy Inc. .
Enron shares were down 2 cents at $3.99 after rising 19 cents, or 4.7 percent, to $4.20 in early dealings on the New York Stock Exchange.
Analysts questioned the viability of the original proposal for Dynegy to acquire Enron in a deal worth about $9 billion.
The Wall Street Journal reported that the companies were discussing reducing the price of the all-stock deal by more than 40 percent, to about $5 billion.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Enron Credit Rating to Remain Unchanged for Today, Moody's Says
2001-11-27 16:12 (New York)

Enron Credit Rating to Remain Unchanged for Today, Moody's Says

     New York, Nov. 27 (Bloomberg) -- Enron Corp.'s credit rating
will remain at ``Baa3,'' the lowest investment grade, by Moody's
Investors Service, which said it won't take any ratings action
today on the largest energy trading company.

     David Stimpson, Moody's managing director for ratings
communication, said although there was speculation in the market
that Moody's would make a ratings change, the company won't take
any action on Enron today. Stimpson declined further comment.

     Moody's had been expected to make a statement on Enron's
credit as bankers sought to raise as much as $2 billion for the
energy trader in private equity.

     Bankers led by J.P. Morgan Chase & Co. Vice Chairman James B.
Lee have been unable for two weeks to raise the money because of
concern Enron won't be able to meet its obligations. That concern
was heightened after Enron disclosed a $690 million payment due
this week. Enron needs the money to operate as it completes an
acquisition by Dynegy Inc.

Enron Turned Down by Investors Alwaleed, Blackstone, Carlyle
2001-11-27 15:16 (New York)

Enron Turned Down by Investors Alwaleed, Blackstone, Carlyle

     New York, Nov. 27 (Bloomberg) -- Enron Corp.'s bankers,
seeking to raise as much as $2 billion for the energy trader, have
been turned down by investors including Prince Alwaleed Bin Talal,
the Carlyle Group Inc. and Blackstone Group LP.

     ``I was approached by several people to invest in the
company, but we declined,'' said Alwaleed, a billionaire investor
from Saudi Arabia. The fall in Enron's shares, which have declined
95 percent this year, didn't necessarily make it a good
investment, he said.

     Bankers led by J.P. Morgan Chase & Co. Vice Chairman James B.
Lee have been unable for two weeks to raise the money because of
concern Enron won't be able to meet its obligations. That concern
was heightened after Enron disclosed a $690 million payment due
this week. Enron needs the money to operate as it completes an
acquisition by Dynegy Inc.

     The prospect that Enron will fail to line up financing,
jeopardizing its plan to be acquired by Dynegy, has weighed on its
stock and bonds. The company's securities gained today as talks
between Enron and Dynegy to renegotiate terms of the transaction
convinced some investors the takeover was more likely to take
place.

     Enron 6.4 percent bonds that mature in 2006, which closed
yesterday at 48 cents on the dollar, rebounded to trade at about
55 cents on the dollar. At that price, the bonds yield 22.5
percent. Enron shares rose 21 cents, or 5 percent, to $4.22. The
stock finished yesterday at $4.01, its lowest level in 14 years.

                        Declining to Invest

     J.P. Morgan and Citigroup Inc., Enron's largest lenders, plan
to provide $250 million to Enron each as part of a $2 billion
package. The bankers have been seeking additional investments,
which would be made in the form of convertible stock, for more
than two weeks.

     Questor Management Co., a $1 billion private-equity fund that
invests in troubled companies, and buyout funds such as Carlyle
Group and Blackstone have balked at investing, said people
familiar with the situation. Blackstone and Questor declined to
comment. Christopher Ullman, a spokesman for Carlyle, said: ``We
are not in discussions with Enron about financing.''

   ``More equity would leave Enron with a stronger balance sheet,
which should reassure their trading partners,'' said Kathleen
Vuchetich, who helps manage $1.4 billion in assets at the Strong
American Utilities Fund. Vuchetich has 4.2 percent of her
portfolio invested in Dynegy shares.

     Enron and Dynegy discussed revising the terms of their merger
over the weekend, said Steve Stengel, spokesman for Dynegy. Dynegy
is now talking about paying less than 0.15 share for each of
Enron's, valuing the company's equity at about $5 billion, or less
than $6 per share, the Wall Street Journal reported, citing people
close to the discussions.

                               Terms

     ``The concern is that the Dynegy deal breaks down,'' said
Paul Tice, co-head of U.S. high-grade credit research who covers
the energy market for Deutsche Bank.

     Current terms call for an exchange ratio of 0.2685 share of
Dynegy stock for each Enron share. Given recent disclosures about
Enron's debt and the drop in the stock price, a fairer ratio would
be 0.15 share of Dynegy, said Ronald Barone, a UBS Warburg analyst
who rates Dynegy a ``strong buy.''

    Under current terms, the deal makes sense for Dynegy only if
Enron earns 85 cents or more next year, said Gordon Howald, an
analyst at Credit Lyonnais who rates Dynegy a ``buy.'' UBS
Warburg's Barone has reduced his estimate of Enron's 2002 earnings
to 75 cents a share from $1.65.

     Enron needs an infusion in part because it has $9 billion of
payments due before the end of 2002 and less than $2 billion in
cash and credit lines. The decline in reserves has also raised the
prospect that Moody's Investors Service may cut Enron's credit
rating. A lower rating would trigger $3.9 billion in debt
repayments for two affiliated partnerships.

                           Cash Question

     ``The main question is: `What is the cash position right
now?''' said Tice at Deutsche Bank. ``Is the falloff in the cash
position of the company stabilizing or not?''

     Moody's hasn't issued a report on Enron since the company
filed a quarterly report with the Securities and Exchange
Commission last week announcing it had a $690 million note due
this week. On Wednesday, Enron got a three-week reprieve from
lenders on the $690 million note and closed on a $450 million
credit line. Dynegy Chief Executive Officer Chuck Watson said he
was ``encouraged'' by the developments.

Liberty Funds Analyst Paik Comments on Dynegy and Enron Talks
2001-11-27 11:56 (New York)

     Boston, Nov. 27 (Bloomberg) -- Edward Paik, an analyst at
Liberty Funds Group, comments on Dynegy Inc.'s proposed
$23 billion acquisition of Enron Corp., the largest energy trader.

     Paik has Enron shares among the $3.6 billion in assets he
helps manage at Liberty.

     Dynegy may renegotiate terms of its bid for Enron, people
familiar with talks between the Houston-based companies said
yesterday.

     ``The stock market is clearly 100 percent certain the Dynegy
deal won't go through as negotiated,'' Paik said. ``We're just
waiting.''

     ``If they announce they've renegotiated the deal, it will be
implicit that due diligence has been done, and that Dynegy won't
walk away for anything that's happened up until now. If they were
to impose more conditions, what good is that? Dynegy needs to
resuscitate Enron back to health.''

A.G. Edwards Analyst Heim Comments on Dynegy and Enron Talks
2001-11-27 11:00 (New York)

     St. Louis, Missouri, Nov. 27 (Bloomberg) -- A.G. Edwards &
Sons Inc. analyst Michael Heim comments on Dynegy Inc.'s proposed
$23 billion buyout of Enron Corp., the largest energy trader.

     Dynegy may renegotiate terms of its bid for Enron, people
familiar with talks between the Houston-based companies said
yesterday. Heim rates Enron ``sell'' and Dynegy ``hold'' and
doesn't own shares of either company.

     The market is waiting for confirmation and details of a
renegotiated bid, Heim said.

     ``We'd need to know why they'd agreed to a new price,'' Heim
said. ``It also needs to be combined with some sort of shoring up
of Enron's trading business, which needs to be stabilized for the
deal to have real value.''

Commerzbank Analyst Meade Comments on Dynegy's Talks With Enron
2001-11-27 10:42 (New York)

     New York, Nov. 27 (Bloomberg) -- Commerzbank Securities
analyst Andre Meade comments on Dynegy Inc.'s proposed
$23 billion buyout of Enron Corp., the largest energy trader.

     Dynegy may renegotiate terms of its bid for Enron, people
familiar with talks between the Houston-based companies said
yesterday. Meade rates both companies ``hold'' and owns no shares.

     ``If they are renegotiating, it confirms our fears that
Enron's crown jewel, its marketing and trading business, is
deteriorating,''

      Investors are waiting for a sign on the state of the
business, Meade said.

      Enron's trading business was worth more than $10 billion
before partners began shunning it on credit concerns, Meade said.
A lower price struck by Dynegy may reveal how much business has
fallen, and whether Dynegy believes Enron can regain it, Meade
said.

     A New York Times report that banks may extend payments on
some loans until after Dynegy purchases Enron ``raises concern
that Dynegy will be hurt by taking on the vast liabilities of
Enron,'' Meade said.

ENRON SHARES RECOVER FROM A.M. SLUMP
By Lisa Sanders
CBS.MarketWatch.com

4:10 PM ET Nov 27, 2001

HOUSTON (CBS.MW) -- Shares of Enron recovered from the morning's sub-$4
a share level Tuesday amid reports that the embattled energy merchant is
working with Dynegy to renegotiate its takeover offer.

Enron (ENE), which once hit $84.88 during the last holiday season,
added 13 cents to close at $4.14 on volume of 68.4 million shares. The
stock was the most actively traded on the New York Stock Exchange
Tuesday.

Dynegy shares added $1.64 to close at $40.89.

The New York Times reported that Houston-based Dynegy (DYN) and Enron
are renegotiating Dynegy's bid, once valued at $9 billion in stock.
According to the report, Dynegy is worried that Enron's core business --
energy trading -- is deteriorating. See full story.

Getting it done

_______________________________________________________________________

Glen Hilton, portfolio manager of the Montgomery New Power Fund, said
it's a "crapshoot" as to whether the deal gets done.

"I think that regardless of the outcome Dynegy is still in a good
position for the long-term," he said. His fund liquidated its Enron
holdings completely in mid to late-October. "Enron was the leader (in
energy trading), and it's clearly suffering so Dynegy is in a good shot
to take up the mantle."

Hilton pointed to Enron's 10-Q, filed last Monday with the Securities
and Exchange Commission, and the falling share price as potential
triggers of the deal's material adverse affect clause. Those two things
could very well make Dynegy walk away from the merger. If that happens,
Hilton said, an Enron bankruptcy is a very real possibility.

"Very few companies understand what Enron does and Dynegy is one of the
few that could make something out of it," Hilton said. "If Dynegy can
restore confidence in Enron's trading business and get Northern Natural
Gas, it looks like it might be worth the headache."

Dynegy has the rights to Enron's Northern Natural Gas, a pipeline
system, whether the merger goes through or not.

Enron wasn't immediately available for comment. Dynegy, through a
company spokesman, confirmed that it was in discussions with "the
parties involved in the transaction" related to the structure of the
deal.

Top Of The News
Enron In Free Fall
Dan Ackman <javascript:newWindow('Ackman')>, Forbes.com <http://www.forbes.com/news>, 11.27.01, 9:00 AM ET

NEW YORK - If not for Sept. 11, Enron would be a major scandal; as it stands, it's a minor scandal. The Houston-based energy company, whose Chairman Kenneth Lay is a personal friend of and top fundraiser for President George W. Bush <http://www.forbes.com/2001/10/12/gwbush.html> and Vice President Dick Cheney, is in free fall. The bailout by rival Dynegy made public three weeks ago appears to be unraveling.

Dynegy's (nyse: DYN <http://www.forbes.com/finance/mktguideapps/compinfo/CompanyTearsheet.jhtml?tkr=DYN> - news <http://www.forbes.com/markets/company_news.jhtml?ticker=DYN> - people <http://www.forbes.com/peopletracker/results.jhtml?startRow=0&name=&ticker=DYN>) buyout of Enron (nyse: ENE <http://www.forbes.com/finance/mktguideapps/compinfo/CompanyTearsheet.jhtml?tkr=ENE> - news <http://www.forbes.com/markets/company_news.jhtml?ticker=ENE> - people <http://www.forbes.com/peopletracker/results.jhtml?startRow=0&name=&ticker=ENE>) was originally valued at $9 billion. But just as the deal was announced, Enron said its prior financial reporting was inaccurate and that it had overstated earnings by $586 million over the past four years.

While the companies have not said the merger is off, investors don't believe it will happen, at least not at the stated price; they have bid Enron shares down to the point where the company has a market value of less than $3 billion. The shares closed yesterday at $4.01, down from $78 a year ago.

The situation is in flux, as it has been for months. During that time, several top Enron executives have been forced to resign. Jeffrey Skilling, Enron's former chief executive officer, left in August for "personal reasons."

Company officials said they hope to announce, perhaps as early as today, a series of changes: a lower price for the takeover; a cash infusion of $500 million; new, extended loan terms by Enron's bankers; and somehow, an agreement that prevents Dynegy from walking away in the face of litigation over Enron's devastated employee-retirement plan. Lawsuits by shareholders are sure to follow, considering Enron's restatement and the pay it lavished on executives, including Lay who received $135 million from salary, bonus and the exercise of stock options in 2000 alone.

For now, Dynegy says it still wants to do a deal for its crosstown rival with 2000 revenue of $101 billion.

Even more alarming than the deterioration in the share price is the crisis of confidence in Enron's reliability as a trading partner in worldwide energy markets. Last year, Enron was the dominant player in natural gas and electricity trading--a fast-paced, complex business quite removed from the company's history as a gas- and oil-pipeline builder and operator. The fear now is that other companies will refuse to trade with Enron out of trepidation that it will file for bankruptcy and not pay its bills.

The company had $10.5 billion in debt as of its last annual report, and that number has likely grown by 20%. Already, credit agencies have cut their ratings on Enron debt.

Dynegy and its partner, ChevronTexaco (nyse: CVX <http://www.forbes.com/finance/mktguideapps/compinfo/CompanyTearsheet.jhtml?tkr=CVX> - news <http://www.forbes.com/markets/company_news.jhtml?ticker=CVX> - people <http://www.forbes.com/peopletracker/results.jhtml?startRow=0&name=&ticker=CVX>), may pump billions of dollars into Enron's operations if the purchase goes through. But the deal will certainly undergo regulatory scrutiny and will take months to close. Investors and energy traders are increasingly doubtful that Enron can hang on by itself.

Enron bills itself as one of the world's leading energy, commodities and services companies. It says it "markets electricity and natural gas, delivers energy and other physical commodities, and provides financial and risk management services to customers around the world." While all this may be true, its popularity with investors was based largely on its fast-growing revenue--much like the Internet companies whose collapse it mirrors.

Few shareholders had any understanding of what Enron did to generate that revenue, and indeed Enron's own auditors at Arthur Andersen were confused. Most of the revenue was generated from trading, but the company's shares sold as if it was still an industrial company and not a financial firm.

Enron was famous for being famous. Before the start of the 2000 baseball season, it purchased the rights to have its name on Houston's new ballpark. By 2002, Enron Field may need a new name.

The name Enron itself sounds like it has something to do with energy, but it means nothing. At the time the company was formed from the merger of InterNorth of Omaha and Houston Natural Gas, the idea was to call the company Enteron. But the namers then looked in the dictionary and found out that Enteron means "intestines;" they decided to drop the "te" in the middle and go with Enron. Soon Enron may be part of Dynegy, a much smaller company in terms of revenue. If the deal falls apart, it may want to go back to Enteron.


Refer such calls to Karen Denne in Houston.  Thanks.

	George Waidelich@EES
	12/11/2000 04:57 PM

		 To: Eric Letke/DUB/EES@EES, Greg Sharp/HOU/EES@EES, Susan J
Mara/NA/Enron@ENRON, Jeff Dasovich/NA/Enron@Enron
		 cc:
		 Subject: Media Story

I received a call from Tim Roberts of the Energy Journal in San Jose CA.
They are writing a piece on the current energy situation in CA and how it is
effecting IPP's and power marketers and their intentions towards the CA
market in the future.  He would like to speak with somebody at Enron.  As far
as I know, I do no have media clearance so I had no comment.

If Enron wants an opportunity to make a public statement we should talk to
this guy as early as possible today or tomorrow.  He can be reached at
408-299-1821.

George Waidelich
925-543-3801


Dear Miss Symes,

Thank you for inquiring about our program! a Complete information and
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form. Please read the instructions carefully (especially for financial
aid--incomplete application for financial aid will NOT be considered).

Additionally, while waiting for your package to arrive by mail, you may also
wish to visit the Bologna Center website (www.jhubc.it). The school updates
the site regularly and in it you will find the most recent information,
including the dates and locations scheduled for the interviews
(www.jhubc.it/admissions).

The application Deadline was February 1, 2001. However, the admissions
office is currently still accepting late material.

If you wish to apply for 2001-02 Academic Year, you should download the
forms directly from the Bologna Center website
www.jhubc.it/admissions/appdownloads), fill them out and send them via
courier as soon as possible.

Information about scholarships are available on the website (also on the
"appdownload" page). Also, you will receive a list of institutions offering
fellowships together with you application package. Please note, however,
that resources are quite limited and the selection process very competitive.
Hence, we advise applicants to look for additional contacts themselves.

I look forward to receiving your application.
Best wishes and good luck!

Tommaso Wiechmann
Admissions Office
The Johns Hopkins University
SAIS Bologna Center

-----Original Message-----
From: Kate.Symes@enron.com [mailto:Kate.Symes@enron.com]
Sent: Friday, February 23, 2001 3:05 AM
To: admission@jhubc.it
Subject: Admissions Information

I would like to request information and application materials for your
International Studies program in Bologna. I am interested in applying for
the academic year of 2002-03.

Thank you,
Kate Symes
2505 NE 32nd Place
Portland,OR 97212
(503) 288-6546

 - Tommaso Wiechmann.vcf


ISDA PRESS REPORT - MAY 3, 2001

*  ISDA lobbies FASB on swaps - Financial Times
*  Corporates warm to charms of credit derivatives - Reuters
*  Fed Proposes Rules On Derivatives, Intraday Lending - Dow
Jones
* Banks urged to improve credit, operational risk disclosure - IFR
* Argentina crisis default swap ripples contained - IFR
*  Fed Proposes First-Ever Regulation To Govern Limits on
Affiliate Transactions - BNA

ISDA lobbies FASB on swaps
Financial Times - May 3, 2001
By Vincent Boland

The International Swaps and Derivatives Association has expressed concern
that proposed changes to US accounting standards and tax regulations could
have a negative impact on swaps transactions. In a submission to the US
Federal Accounting Standards Board, ISDA said that definitions of
liabilities and equity as "residual interest" were adequate and that it had
asked the FASB to reconsider proposed changes and to retain the current
accounting model. It also said, in a submission to the Internal Revenue
Service, that it was concerned that proposed changes to hedging regulations
did not properly implement Congressional intent with regard to risk
management standards that qualify for hedging treatment.

Corporates warm to charms of credit derivatives.
Reuters English News Service - May 3, 2001
By Tom Bergin

European corporates are beginning to turn to credit derivatives, among the
more esoteric and complex of financial instruments, to hedge the risk their
debtors won't pay up, market participants said on Thursday.

Credit derivatives are insurance-like tools that allow users to hedge the
risk of default on a debt. They are mainly used by banks, hedge funds and
insurance companies to hedge or gain exposure to the risk of a bond issuer
defaulting.

Dealers said an environment of deteriorating credit quality and a growing
awareness among corporates that credit derivatives offer certain advantages
over established hedging tools was behind the increasing use of the
instruments.

The market remains small, with only around a dozen non-financial European
corporates regularly using credit derivatives to manage their credit
portfolio at present. But market professionals predict they will one day
become as commonplace in the corporate world as other hedging tools such as
interest rate swaps and currency options.

"We see (corporate use) as a big growth area for credit derivatives, maybe
the biggest," says Bryan Seyfried, vice-president of Enron Credit in London.

Enron Credit grew out of the efforts of energy company Enron Corp. to hedge
its own credit risk portfolio and now specialises in marketing credit risk
management solutions to other non-financial corporates.

Ralf Lierow, director of credit derivatives at Siemens Financial Services in
Munich, said the ability to buy and sell in a liquid market means credit
derivatives offer a flexibility that established tools like credit insurance
and forfaiting guarantees lack. Credit derivatives were are often cheaper
than the alternatives, too, he added.

"This is not a trading book thing. For us, the credit default swap is
another tool for credit risk management," Lierow said.

HELPS OPERATIONAL UNITS DO MORE BUSINESS

Siemens Financial Services acts as the centralised risk portfolio management
operation for companies within the Siemens electronics and industrial group.
It first started using credit derivatives in July 2000.

Large companies like Siemens can have hundreds of millions of dollars in
receivables on their books at any time. The efficiency with which these
companies manage the credit risk on their receivables has an impact on their
day to day business.

"The advantage for the operative area is that they can offload more
receivables and do more business," Lierow said.

Siemens uses credit default swaps , the most liquid type of credit
derivatives, to hedge its portfolio of debtors on a constant basis. As the
balance of cash owed by each name fluctuates over time, the company tries to
match this with default swap positions. Hence, if a customer fails to pay,
Siemens can recoup the debt from the default swap seller.

Other companies use credit derivatives less frequently.

"There are occasional corporate users that have secured one-off requirements
for balance-sheet management aims or to strip out the credit risk of a
commercial transaction," said Walter Gontarek, head of global credit
products at RBC Dominion Securities.

By hedging a country or company risk which a corporate may not be
comfortable in carrying, a credit derivative can facilitate a project that
may otherwise be unfeasible, dealers said.

NOT PUT OFF BY BAD PRESS

Corporates' adoption of credit derivatives is in spite of the negative
publicity the instruments have received in recent years. A number of
disputes over whether protection buyers could force banks to pay up on
contracts have ended up in court. However, traders insist that subsequent
work done on contract documentation minimises the risk of such disputes in
future.

Nonetheless a very practical concern for corporates remains, in that credit
derivatives documentation was designed by bankers with sovereign and
corporate bonds in mind. The International Swaps and Derivatives Association
(ISDA) standard documentation for credit default swaps allows for a pay-out
in relation to defaults on bond payments but not on a private debtor's
failure to pay.

"We use the ISDA framework but we need it redrafted in specific ways to fit
our needs. You cannot take a standard contract and trade on it if you want
to hedge trade receivables," Lierow said. These amendments add to the cost
of the credit derivative.

Another problem that corporates face is the complexity of credit
derivatives. There is little experience of the instruments, which are barely
a decade old, in the corporate world. Siemens had to get its expertise from
the financial markets, hiring Lierow from Bankgesellschaft Berlin.

Clive Banks, UK head of derivatives sales to buy-side clients at Schroder
Salomon Smith Barney, said much of the effort in marketing credit
derivatives to corporates involves educating them about the products and the
risks involved.

"It's about explaining credit risk management and what kind of volatility
and cost having credit risk introduces," he said.

OUTLOOK PROMISING

Yet some corporates are beginning to take full advantage of their new tool.
Lierow said that Siemens, which currently only buys credit protection,
planned to start acting as a default swaps seller in the coming months.

He said selling would facilitate better matching of protection levels to
actual exposures, and would enable diversification of risk away from
industry sectors where the company's activities are concentrated.

"You could improve the portfolio mix by buying protection on automotives and
selling protection on pharmaceuticals," he said.

Fed Proposes Rules On Derivatives, Intraday Lending
Dow Jones - May 3, 2001
By Dawn Kopecki

The Federal Reserve Board Wednesday proposed regulations that would place
restrictions on intraday lending as well as on derivatives contracts between
banks and their affiliates.

The Fed is seeking public comment on the proposal, which would apply rule
23A of the Federal Reserve Act to derivatives contracts as well as to
intraday extensions of credit. The proposal is designed to limit a bank's
exposure to risk from an ailing affiliate.

Section 23A limits the ability of an insured depository institution to
extend credit to or purchase assets from an affiliate. It also establishes
collateral requirements for credit transactions between banks and their
affiliates.

Fed officials also proposed to extend rule 23B, which requires that
transactions between banks and their affiliates be on market terms, to
derivatives and intraday loans.

Under the interim rule, over-the-counter (OTC) derivatives contracts would
have to be collateralized and the terms of the contract would have to
reflect market prices. Banks would also have to have procedures in place to
handle derivatives transactions and intraday lending.

The interim rule, which is not yet final and could change, would go into
effect Jan. 1, 2002.

"Its primary goal will be to establish barriers protecting depository
institutions from the problems of a failing affiliate," said Anthony
Santomero, president of the Federal Reserve Bank of Philadelphia, in a
speech earlier this year. "Even with the best of intentions, this regulation
will prove difficult to codify and will be subject to close scrutiny."

The proposal was precipitated by legislation passed in late 1999 that
overhauled the U.S. financial service sector. The Gramm-Leach-Bliley Act
also required the Fed to issue rules by May 12 on derivatives transactions
done by banks.

The Federal Reserve Board also unanimously adopted a new rule that exempts
certain transactions between banks and their affiliates from those same
collateral standards as well as from other restrictions.

For example, loans made by a bank to an unaffiliated borrower that then uses
the loan to buy securities underwritten or sold by a brokerage affiliated
with the bank would be exempt from rule 23A.

Banks urged to improve credit, operational risk disclosure
IFR - April 28, 2001

International banks will need to increase credit and operational risk
disclosure to regulators, according to a report issued by the Bank for
International Settlements last week. "There is still a long way to go
compared with the current practice," said an official at the regulatory
body. Disclosure related to credit derivatives and banks' use of internal
credit risk rating methods, as well as disclosure of methods for measuring
and assessing operational risk was lacking, the BIS report found.

Fewer than half of the banks that use credit derivatives disclosed their
strategies and objectives for the use of such instruments, it noted.
Furthermore, only 18% of banks disclosed a breakdown of type of credit
derivative instrument used, notional and fair values, and the amount of
credit risk bought or sold, it added.

Similarly, few banks provided summary information on the quality of on and
off-balance sheet credit exposures based on internal ratings or external
ratings, the report said, noting that this is an area where disclosure could
be improved.
According to the report, less than one quarter of the banks described how
internal ratings are used in the bank's capital allocation process. The
adequacy of disclosure related to the use of internal ratings will be an
area of increased importance under the new Basle Capital Accord as banks
will need to qualify to allow their internal based approaches to be
considered, the BIS report said.

Overall, banks did disclose their objectives and strategies in using
derivatives to hedge risks, with 81% of banks disclosing their objectives
for the use of non-trading derivatives. Fifty-seven banks from the 11 Basle
Committee member countries took part in the survey conducted by the BIS
transparency working group.

The report found that while 96% of respondents disclosed their risk-based
capital ratio in accordance with the methods prescribed in the Basle Capital
Accord, only 30% provided all of the information relevant to understanding
how Basle requirements for market risk under internal models have been
calculated. Further, only half of those surveyed disclosed whether they had
an internal process for assessing capital adequacy and for setting
appropriate levels of capital.

The absence of existing guidance at the time of the study is the likely
reason for the poor marks for disclosure on operational risk management.
"They should see how their [operational risk management] practices compare
with guidance released in January," said a BlS official.

A discussion paper elaborating on the tenets of the Basle Committee's
January proposal is slated for release toward the end of the summer. The aim
of the paper will be to assist banks in their implementation of the final
proposal, which is due for release at the end of the year. The Basle
Committee in its most recent draft proposals indicated its intention to levy
an operational risk capital charge.

Although the BIS conducts annual reports on bank disclosure practices, the
1999 survey cannot be compared directly with previous surveys as its focus
shifted away from trading and derivatives to cover other areas such as
operational risk.

Argentina crisis default swap ripples contained
IFR - April 28, 2001

Argentine default swaps drove out last week, as the sovereign teetered on
the brink of a forced restructuring of its debt. The ripple effect on credit
default swaps in other Latin American sovereigns was limited, however, and
even Argentine quotes were well off their highs by the end of the week.
Investment grade corporate default swaps mostly fell on the back of a wave
of CDO portfolio position unwinds.

There was one-year Argentina default swap trade as high as 2,450bp last
Monday, but by the end of the week, the maturity was quoted at
1,225bp/1,725bp. For much of the week, the market was illiquid, with major
dealers saying that they would only come inside bid/offer spreads to do
client trades.

There was mild curve inversion in Argentina by the end of the week, with
two-year quotes at 1,lOObp/1,600bp, the five-year at 1,060bp/1,520bp, and
the 10-year at 1,000bp/1,400bp.

The basis between default swaps and the asset swap value of Argentine FRB
debt was very wide. For much of the week FRBs were trading at levels at
least 300bp tighter than the apparent realistic mid-point for default swaps.

Before the most recent crisis in confidence over Argentina's ability to
raise funds, and to maintain its currency peg to the dollar, its default
swaps were trading at levels tighter than the asset swap value of comparable
FRBs.

Brazilian default swap levels were not hit as hard as those in Argentina,
and Mexican credit protection swaps did not suffer contamination from
Argentina's troubles. There was one-year trading in Brazil default swaps
seen at least as high as 475bp, but quotes in the maturity at the end of the
week were at 360bp/430bp.

Brazil's default curve also remained positive - with the three-year at
620bp/695bp at the end of the week, the five-year at 660bp/740bp and the
10-year at 740bp/820bp.

The basis between the asset swap value of Mexican dollar debt and its
default swap prices remained at a comparatively tight 2Obp-30bp, which
indicated that there had been no aggressive move to buy default swap
protection, Its one-year default swap quotes were holding in at 100bp/135bp
at the end of the week, its three-year quotes at 200bp/240bp, five-year
prices at 250bp/290bp (there was trade at 273bp) and its 10-year prices at
280bp/320bp.

There was a sharp decline in credit default swap quotes for many of the most
liquid corporate names on the back of off-loading of CDO positions by some
of the bigger dealers. Telecoms and auto conipany quotes fell as a result of
this swap selling, with many benchmark quotes falling by 10bp or more last
Thursday.

British Telecom was one of the biggest movers, trading at least as low as
120bp in the five-year, having been l5bp higher the session before. Its
quotes were well offered on the back of the announcement of the replacement
of chairman lain ValIance, and talk of a o5bn rights issue to replace debt,
as well as the effect of the CDO selling.

France Telecom dealt at levels below 70bp in the one-year and its five-year
mid quotes fell below l20bp.

DaimlerChrysler saw five-year trading below lOObp, and its mid quotes were
approaching 9Obp by the end of the week, having started the week at 1 l5bp,
while Ford and GMAC both saw five-year trade as low as 83bp.

Not all investment grade corporate default swaps fell, however.

Carnival continued to be strongly bid on the back of hedging of its recent
convertible bond, which was increased by US$ lOOm to US$600m.

There was five-year default swap trading in Carnival seen at levels
including 8Obp.

Fed Proposes First-Ever RegulationTo Govern Limits on Affiliate Transactions
BNA - May 3, 2001
By R. Christian Bruce and Richard Cowden

The Federal Reserve Board unveiled one of its most important regulatory
projects in recent years on May 2 and asked for comment on a proposed
regulation that would implement key provisions in federal law limiting
transactions between banks and their affiliates.

As required by Congress, the Fed also released an interim rule to cover
aspects of those transactions and finalized another rule that addresses
exemptions from the law.

The proposed Regulation W marks the first time the Fed has formulated rules
implementing restrictions under Sections 23A and 23B of the Federal Reserve
Act, two of the most important laws for federally-insured banks.

Although the Fed has offered advice and interpretation before with respect
to Sections 23A and 23B, it has done so using legal rulings and advisory
letters geared to specific cases.

Now the Fed is updating those interpretations and putting all of the
information in one place. "The proposed Regulation W seeks to provide users
with a single, comprehensive reference tool for complying with and analyzing
issues arising under sections 23A and 23B," the Fed said.

Action in Three Parts
In its May 2 meeting, the Fed took three distinct actions. The Fed issued an
interim rule, effective Jan. 1, 2002, that requires banks to establish
policies and procedures to monitor and control credit exposure from intraday
credits and derivatives transactions with affiliates. Although the effective
date is delayed, banks are expected to get to work on the new policies and
procedures as soon as possible. The interim rule also clarifies that both
types of transactions are covered under Section 23B, which means that banks
will have to treat those transactions as "arms-length" transactions, just as
they would with any other third party. The Fed expressly declined to rule on
whether derivative transactions between banks and affiliates are covered
transactions under Section 23A;
asked for comment on the main text, the proposed new Regulation W, which
would incorporate many existing Fed pronouncements and interpretations
applying Sections 23A and 23B, as well as adding some important new
wrinkles; and issued a final rule setting out various transactions that are
eligible for exemption from Section 23A. The rule was originally proposed
June 11, 1998. In addition, the Fed is allowing opportunity for further
comment on some of the exceptions during the comment process for the
proposed Regulation W.

Why the Rule Matters
The Fed's three-part initiative is significant because Sections 23A and 23B
are important statutes that protect banks from losses due to transactions
with affiliated institutions, such as securities units or mortgage firms.

According to the Fed, the increasing scope and complexity of bank operations
in recent years sparked more requests for guidance, especially in connection
with Section 23A, which places quantitative limits on affiliate
transactions.

And if transactions with affiliates were important before, they are even
more important now. In 1999, Congress passed the Gramm-Leach-Bliley Act, the
financial services modernization law that was expressly crafted to allow
even broader affiliations between banks, securities companies, and insurance
firms.
The GLB Act, which also amended key provisions in sections 23A and 23B, gave
the Fed until May 12 to adopt rules addressing credit exposure in connection
with intraday credits and derivatives transactions with affiliated
institutions. The Fed accomplished that task by issuing the interim rule.

Finally, the rule is important because it could make things easier for
everyone involved, at least in theory. By crafting an implementing rule for
Sections 23A and 23B, the Fed will be able to consolidate its doctrine. In
addition, the rulemaking process gives bankers the opportunity to shape the
final version of the rule.

Early Reaction
Observers were still poring over the Fed's initiative late May 2, especially
the interim rule and the newly proposed Regulation W. They welcomed the
Fed's decision to delay the interim rule's effective date, saying the time
between now and Jan. 1, 2002, will be put to good use.

Sarah A. Miller, general counsel of the American Bankers Association
Securities Association, told BNA May 2 that the Fed "took a fairly
responsible approach," especially in terms of taking limited action in the
interim rule and leaving many of the tougher issues for the comment process.

Above all, she said, bankers hope that the rule, once finished, will provide
much-needed clarity with respect to Section 23A and Section 23B issues.
"We're elated that the rule is out," she said.
Miller also said the final rule on exemptions will be helpful, especially
provisions addressing certain loans to third parties. She said the ABASA has
been working for such changes since at least 1997. "This is something our
guys have been very much anticipating," she told BNA.

Definitions at Issue
Another analyst noted that the Fed gave a fairly narrow definition of
intraday credits in the interim rule, carving out exceptions for securities
clearing and settlement transactions on behalf of affiliates.

"Clearly, they didn't want to interrupt normal day-to-day dealings that
don't present any real risk," the analyst told BNA.

However, there was some disquiet over other aspects of the Fed's action. For
example, analysts said the interim rule defines "derivative transaction"
quite broadly, so much so that many transactions will fall under the
coverage of Section 23B. According to the Fed, "derivative transaction"
means "any derivative contract covered by the Board's capital adequacy
guidelines [which includes most interest-rate, currency, equity, and
commodity derivative contracts] and any similar derivative contract,
including credit derivative contracts."

Another potential sticking point is how the proposed Regulation W addresses
independent credit judgments under 12 C.F.R. 250.250, an interpretive rule.
The proposal establishes a bright-line quantitative test, but goes on to
give bank examiners significant discretion to decide whether a bank has
shown the independence required to gain a critical exemption under the rule.
Under the proposal, even if the bank meets the quantitative test, it may
still be denied the exemption if the examiner decides that the bank is
providing substantial and ongoing funding to the affiliate.

More Exemptions Could Be on the Way
The Regulation W proposal also allows bankers to comment on potential
additions to the exemptions in the final rule. One would involve purchases
by a bank of municipal securities from a broker-dealer affiliate that is
registered with the Securities and Exchange Commission, according to a Fed
staffer. Among other requirements, the municipal securities must be eligible
for purchase by a state member bank and must be rated by a nationally
recognized rating organization or it must be part of a pool of securities of
less than $25 million.
Another would allow certain companies to charter a new bank and transfer
assets to the new bank from affiliated institutions outside the restrictions
of Section 23A.

A third possible exemption would govern certain credit card transactions. A
Fed official explained a typical case in which the proposed exemption would
apply. "If a [bank] loan to a third party is pursuant to a general purpose
credit card, like a Visa or Mastercard, and the third party buys a product
from an affiliate of the bank, we're going to basically ignore that
transaction," he said.

Another Fed official said the purpose of the exemption was to accommodate
extensions of credit that are not designed to subsidize an affiliate of the
bank through transactions that elude the Sections 23A and 23B limitations.

Comments Due in 90 Days
The proposed rule applies to all federally-insured banks. However, even
though Congress has extended coverage of Sections 23A and 23B to savings
associations, the Office of Thrift Supervision (OTS) will have to craft its
own rule, the Fed said. OTS officials told BNA May 2 that they are studying
the Fed's proposal.

Comments on the proposal are due 90 days after it is published in the
Federal Register. All existing Fed interpretations and staff opinions remain
in effect until the new Regulation W becomes final.

Scott Marra
Administrator for Policy & Media Relations
ISDA
600 Fifth Avenue
Rockefeller Center - 27th floor
New York, NY 10020
Phone: (212) 332-2578
Fax: (212) 332-1212
Email: smarra@isda.org


LARRY CAMPBELL,
?
The PEP system closes on Friday, May 25, 2001.
?
Our records indicate that you have not selected reviewers.  Please suggest a
list of reviewers as quickly as possible - the feedback process cannot begin
until your list of reviewers has been reviewed and approved by your
supervisor.
?
To suggest your reviewers, access PEP at http://pep.enron.com and select
'Suggest Reviewers' from the Main Menu.
?
If you have any questions regarding the PRC process or the PEP system, please
contact the PEP Help Desk at:
Houston:  1.713.853.4777, Option 4 or email: perfmgmt@enron.com
London:  44.207.783.4040, Option 4 or email: pep.enquiries@enron.com


Mr.   Perry:

Pursuant to your request ,  attached is a  GISB  draft for your review.
Please do not hesitate to give me a call with any questions and or comments
regarding this matter.

Regards,
Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


I am out of the office until Jan. 3.  You can reach me if it is urgent at
the following numbers:
home: 281 225 6614
cell: 832 282 0962


Hello Debra:

As you know, Duke Energy Trading and Marketing, L.L.C. ("DETM") and Enron
North America Corp. ("ENA") are operating under a GISB Base Contract dated
December 1, 2000, which covers all of our companies' spot transactions.
However, we still need a contract to cover our companies' term
transactions.  Accordingly, DETM has reviewed ENA's standard master
agreement and has some proposed revisions to this document; attached is a
redlined agreement which reflects DETM's requested changes.

Please review DETM's changes to ENA's agreement and let me know if they are
acceptable.  We would like to execute this agreement as soon as possible
since we currently do not have an agreement that covers our term
transactions, so your immediate attention to this matter is appreciated.
Thank you for your assistance.

- Julie Roberts
Phone:  (801) 531-5443
Fax:  (801) 531-5490

(See attached file: Enron Contract as of October 19, 2001.doc)
 - Enron Contract as of October 19, 2001.doc


Portland General Electric (PGE) has a request for proposals (RFP) that EPMI
wants to submit an offer on.  PGE is essentially seeking a fixed price for
50-200 MW 'round the clock for five years starting in '02 at Portland's
system, the Mid-C, or COB South to North.  Offers are due by March 28 and PGE
has until April 5, 2001 to accept .

I have told Mike that any deal with PGE has to be approved by FERC under the
terms of EPMI's market based rate tariff.  I have also told him that EPMI
could either make the offer subject to FERC approval or take the regulatory
risk that FERC would in some way change the benefits of any contract in PGE's
favor.  I would recommend the former.  Ron - would you tell me how much you
would charge to draft a FERC filing, for my review,  in the event PGE accepts
our offer?  Jim - I intend to submit an RCR for this FERC filing.  Is that
okay?


OK for me.

	Stephanie Sever
	03/27/2001 03:40 PM

		 To: Tana Jones/HOU/ECT@ECT, Karen Lambert/HOU/ECT@ECT, Kelly
Lombardi/NA/Enron@Enron, Tom Moran/Enron@EnronXGate
		 cc: Robert B Cass/HOU/ECT@ECT, Kevin Meredith/Corp/Enron@ENRON, Melba
Lozano/HOU/ECT@ECT, Chris Walker/HOU/ECT@ECT, Lisa Lees/HOU/ECT@ECT
		 Subject: RUSH - EOL PRODUCT TYPE APPROVAL for 7 PHY product types
(Clickpaper to EOL migration)

Tana/Karen/Kelly:

Credit (Tom Moran) has approved copying the profiles for the following new
product types; US East SPF Lumber Phy, US Newsprint Phy, US OSB Phy, US
Recycled OCC #11 Phy, US SYP Lumber Phy, US West SPF Lumber Phy and US
Recycled ONP #8 Phy from the following:

Pulp Phy Fwd

Please respond by 5 p.m. today, Tuesday, March 27.

Thank you.
Stephanie
---------------------- Forwarded by Stephanie Sever/HOU/ECT on 03/27/2001
03:22 PM ---------------------------

Chris Walker
03/22/2001 05:32 PM
To: Jeff Blumenthal/HOU/ECT, Susan Musch/ENRON_DEVELOPMENT, Bjorn
Hagelmann/HOU/ECT, Mark Taylor/HOU/ECT@ECT, Harry M Collins/HOU/ECT@ECT, Tom
Moran/HOU/ECT, Shari Mao/HOU/ECT@ECT, Charlie Hoang/HOU/ECT, Laurie
Lee/NA/Enron
cc: Lisa Lees/HOU/ECT@ECT, Stephanie Sever/HOU/ECT@ECT, Tana
Jones/HOU/ECT@ECT, Karen Lambert/HOU/ECT@ECT, Kelly Lombardi/NA/Enron@Enron,
Tara Sweitzer/HOU/ECT@ECT, Dawn C Kenne/HOU/ECT@ECT, Torrey
Moorer/HOU/ECT@ECT, Robert B Cass/HOU/ECT@ECT, Kevin
Meredith/Corp/Enron@ENRON, Melba Lozano/HOU/ECT@ECT
Subject: EOL PRODUCT TYPE APPROVAL for 7 PHY product types (Clickpaper to EOL
migration)

Please approve the following 7 product types in Datamanager at your earliest
convenience.  The product type descriptions and GTC are attached.

US East SPF Lumber Phy
US Newsprint Phy
US OSB Phy
US Recycled OCC #11 Phy
US SYP Lumber Phy
US West SPF Lumber Phy
US Recycled ONP #8 Phy   changed since last email

STEPS FOR APPROVAL:

click the  START button
select  PROGRAMS
select  TEST APPLICATIONS
select ENRONONLINE CLUSTER(PROD)
 PROCEED WITH USUAL LOGIN/PASSWORD
click the Enron Online Production Cluster "START" button
select EnronOnLine (this is the EOL Datamanager)
 PROCEED WITH EOL LOGIN/PASSWORD
click on the "+" for EnronOnLine
click on the "+" for Product Types
click on the "+" for "Awaiting Approval" (OR  "Partially Approved")
select the product requiring review as stated in e-mail above
Right "mouse" click on "properties" to view product set-up
TO APPROVE:  Right mouse click on "Approved"


Thnaks for the schedule. May I have a copy of the contract as well? Thanks.

JWVS

	Susan Bailey@ECT
	03/02/2001 10:16 AM

		 To: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Sara Shackleton/HOU/ECT@ECT
		 Subject: Re: ISDA Agreement for EECC

John,

At the request of Sara Shackleton, attached is the draft Schedule.

Cordially,
Susan S. Bailey
Enron North America Corp.
1400 Smith Street, Suite 3806A
Houston, Texas 77002
Phone: (713) 853-4737
Fax: (713) 646-3490
E:mail:  Susan.Bailey@enron.com
----- Forwarded by Susan Bailey/HOU/ECT on 03/02/2001 10:14 AM -----

	Sara Shackleton
	03/02/2001 10:09 AM

		 To: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: (bcc: Susan Bailey/HOU/ECT)
		 Subject: Re: ISDA Agreement for EECC

John:  I hope you are able to locate an executed ISDA Master Agreement
between RMT and EECC inasmuch as neither our database nor files reflect one.
, I've asked Susan Bailey to resend the draft Schedule.  In the event that we
need to execute this Schedule, you should provide us with appropriate notice
information. We can then prepare execution originals.

Let me know if you need further assistance.  Thanks.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com

	John Schwartzenburg@ENRON_DEVELOPMENT
	03/02/2001 07:12 AM

		 To: Sara Shackleton@ECT
		 cc: Susan Bailey@ECT, Wyndel McNamara@ENRON
		 Subject: ISDA Agreement for EECC

Sara, our CFO remembers executing one of these some time ago, but we cannot
locate the document yet. If we can't get our hands on it by next week, we
will go ahead and do a new form. Please resend the electornic form of the
ISDA master agreement. Your prior transmission seems to have been deleted in
a clean-up of the e-mails over here.. Thanks

JWVS


Sorry, I sent this to you by mistake.

---------------------- Forwarded by Chris Germany/HOU/ECT on 04/24/2000 11:03
AM ---------------------------

Brenda H Fletcher
04/24/2000 10:02 AM
To: Chris Germany/HOU/ECT@ECT
cc:
Subject: Re: Cove Point Storage

Are you sure about the term?

Chris Germany
04/24/2000 09:45 AM
To: David Oliver/HOU/ECT@ECT, Crystal Hyde/HOU/ECT@ECT, Alex
Perkins/LON/ECT@ECT, Victor Lamadrid/HOU/ECT@ECT, Katherine L
Kelly/HOU/ECT@ECT, Joan Veselack/Corp/Enron@ENRON, Joann
Collins/Corp/Enron@ENRON, Robert Allwein/HOU/ECT@ECT, Angie
Zeman/Corp/Enron@ENRON, Mark Feldman/HOU/ECT@ECT, Brenda H
Fletcher/HOU/ECT@ECT
cc: Scott Goodell/Corp/Enron@ENRON, Dan Junek/HOU/ECT@ECT, Molly
Johnson/HOU/ECT@ECT, Judy Townsend/HOU/ECT@ECT, Dick Jenkins/HOU/ECT@ECT,
Scott Hendrickson/HOU/ECT@ECT, Sarah Mulholland/HOU/ECT@ECT, Robin
Barbe/HOU/ECT@ECT, Maureen Smith/HOU/ECT@ECT
Subject: Cove Point Storage

We have a new Cove Point Storage deal, here are the details;
Term: 4/15/2000 - 3/31/2000
MSQ 360,000
MDWQ 36,000
Demand $.65
Demand Charge for April  $117,000.00
Demand Charge for May - March    $234,000.00/month
Contract  FPS1024

The CPR storage injection deal is 246517, the withdrawal ticket is 249409.  I
entered all the withdrawal volumes to come out of storage the last 10 days of
March,.