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Enron Mail |
Tim, I would argue that we should pursue this business as long as a) we are
being adequately compensated for the financing and underlying commodity risk; b) we have very good paper; c) we are dealing with solid credits and are charging an appropriate risk adjusted cost of capital for the underlying financing; d) we have the ability to syndicate the capital or funds flow position if needed to manage cash issues and e) that RAC is comfortable that we are reaching these goals. Any imbedded financing or $5M or more should be DASHED. David, Joe and Mark should be your key contacts to ensure we are adequately managing these issues but I do not see any fatal flaw in the strategy if priced/managed well and we watch the funds flow issues. Regards Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 11/02/2000 09:15 AM --------------------------- From: Tim Belden 10/31/2000 01:54 PM To: David W Delainey/HOU/ECT@ECT cc: Subject: Commodity / Embedded Finance Deals ---------------------- Forwarded by Tim Belden/HOU/ECT on 10/31/2000 10:57 AM --------------------------- From: Tim Belden on 10/31/2000 11:54 AM To: Dave Delainey cc: Subject: Commodity / Embedded Finance Deals ---------------------- Forwarded by Tim Belden/HOU/ECT on 10/31/2000 10:56 AM --------------------------- From: Tim Belden on 10/31/2000 11:52 AM To: John J Lavorato/Corp/Enron, Dave Delainey cc: Christopher F Calger/PDX/ECT@ECT Subject: Commodity / Embedded Finance Deals We have closed the following deals where we deliver power two a muni in the short term and get paid back power later on. These deals have both a commodity and a finance portion: Counterparty Loan Period Repayment Period Amount Financed Grant County 7/01 to 7/06 7/06 $4.7 million Grant County 5/01 to 7/06 7/06 $5.7 million Avista/Kaiser 7/2000 7/2000 to 7/2006 $31.3 million BPA/Kaiser 9/2000 7/2001 to 9/2001 $36 million Clatskanie 11/2000 to 9/2001 10/2001 to 9/2006 $5 million Eugene Water and Electric 1/2001 to 3/2002 11/2001 to 4/2002 $4.9 million Eugene Water and Electric 7/2001 to 12/2002 5/2002 to 12/2002 $7.3 million We are seeing demand for more of these. For example, Tacoma City Light is looking at $35,000,000 + in this type of structure. What do you guys need to know about this business and how much of an appetite do we have for this?
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