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Enron Mail |
Enron North America and Enron Europe will offer credit derivatives through=
=20 the EnronOnline website in the near future. These products will provide fo= r=20 regularly scheduled payments by the purchaser and a payment by the seller i= n=20 the event of the bankruptcy of a specified =01&Reference Entity.=018 =20 For a number of reasons, including those identified below, Enron maintains = a=20 =01&Restricted List=018 in connection with its credit derivatives business,= which=20 will list those entities that may not be included in the list of Reference= =20 Entities or that have been deleted from the list of Reference Entities. Th= is=20 list is designed to comply with legal requirements, to deal with potential= =20 conflicts of interest that might result because of our diverse activities,= =20 and to prevent the appearance of impropriety in connection with Enron=01,s= =20 credit derivatives trading activities. The credit derivatives Restricted= =20 List is designed for other purposes as well. For example, a company may be= =20 placed on the Restricted List if Enron is not able to assume any further=20 credit exposure to that company or believes that market conditions do not= =20 warrant the trading of Credit Derivatives on such Reference Entity. A company ordinarily will be placed on the credit derivatives Restricted=20 List, either before or after it has become a Reference Entity on which cred= it=20 derivatives are traded, in the following circumstances: when Enron is actively engaged in effecting a material transaction with=20 respect to such company that has not been publicly announced; when Enron has an applicable standstill agreement or other confidentiality= =20 agreement in place with such company; when Enron has a legal duty to keep such company's information confidential= =20 and such company has not expressly consented to being a Reference Entity fo= r=20 purposes of the trading of credit derivatives (such a legal duty may be a= =20 fiduciary duty but may not rise to that level); when some part of Enron acquires material, nonpublic information about a=20 company or its securities in the course of its business activities; when Enron has reached or exceeded its credit limits with respect to such= =20 company. The purpose of this memorandum is to alert you to this new business and to= =20 request your assistance in evaluating proposed Reference Entities prior to= =20 the trading of credit derivatives based on such companies. Below is a list= =20 of proposed Reference Entities. Please take a few minutes to look at this= =20 list and then let me know if you are aware of any reason such companies=20 should placed on the credit derivatives Restricted List. If you have any= =20 questions, please contact me at (713)853-7459 or Paul Simons in the London= =20 office at 44-20-7783-6566. Cinergy Corp. Duke Energy Corporation Dynegy Inc.=20 El Paso Energy Corporation PG & E Corporation Southern Company Inc, The AOL Lucent Technology Nortel Qwest Communications
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