LJM Update ,
 Vince/Stinson:

I just came back from a meeting with Accounting (Ryan Siueck) and Credit (Rod 
Nelson - works with Bill Bradford) in which we presented the two-factor model 
for calculating credit loss on our LJM's position. Rod seemed positive with 
the model conceptual approach. He will position Bill Bradford on that. 
Accounting will have a meeting with AA to discuss the treatment on credit 
reserves on this deal tomorrow 9:00 AM. They feel my participation is not 
necessary. 

At year-end the difference on both valuations - without and with credit risk 
- indicates a credit loss of about 100 MM. 

Paulo Issler
vince.kaminski@enron.com, stinson.gibner@enron.com