Heartland Steel Bankruptcy 1/24/01

Sally and Shona,

Heartland Steel declared Bankruptcy today (1/24/01). We have $10.7 M of
Heartland in Enron Americas portfolio and $38.5 M in Enron Raptor I (which is
100% hedged); however, we have exceeded the maximum loss capacity in Raptor
I. Hope Vargas (in Wes Colwell's group) and I are working with Corporate
Raptor to determine if Raptor II is going to continue to cover excess losses
in Raptor I or if we are going to allocate these losses back to the Enron
Americas business units. As a result, we have not written the Heartland
investments to zero on the 1/24/01 MPR.

I will keep you updated on the status of this issue. Please call me at
x3-6983 if you have any questions.

David