Asian Credit Alert- AP & P

FYI. These guys do great intelligence work for us, and I'd be happy to help
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Best,

Jeff
----- Forwarded by Jeffrey A Shankman/HOU/ECT on 02/07/2001 10:42 AM -----

Robert Johnston
02/07/2001 10:03 AM

To: Jeff Kinneman/HOU/ECT@ECT, Gary Hickerson/HOU/ECT@ECT, Jeffrey A
Shankman/HOU/ECT@ECT
cc: Darren Delage/AP/Enron@Enron, Michael W Bradley/HOU/ECT@ECT, Eric
Scott/HOU/ECT@ECT, Pushkar Shahi/HOU/ECT@ECT, William Stuart/HOU/ECT@ECT,
Steve Jacobellis/NA/Enron@Enron, Brendan Fitzsimmons/NA/Enron@Enron, Kimberly
Landry/NA/Enron@Enron, Scott Tholan/Corp/Enron@Enron
Subject: Asian Credit Alert- AP & P

The Asian Pulp & Paper debt situation is once again becoming critical to
Asian growth prospects. AP & P is the most popular Asian bond holding among
foreign investors. AP & P narrowly met a Feb.1 deadline for a debt payment
and has a 30 day grace period on another which runs out at the end of
February. Depressed pulp and paper prices and a high risk premium for
Indonesian debt raise serious doubts about AP & P's ability to meet this
payment.

The ripple effect of an AP &P default or government-imposed restructuring
would be significant for Asian credit and equity markets, with possible
contagion effects for other emerging markets. We will continue to update
this issue in the days ahead.

RJ