FW: Mahonia X Advance Payment Guarantee Bond/Hartford Bond ,
 FYR
 -----Original Message-----
From: =09Bouillion, James L. =20
Sent:=09Friday, November 09, 2001 3:25 PM
To:=09McMahon, Jeffrey; Derrick Jr., James
Cc:=09Sekse, Per; Deffner, Joseph; Armogida, Jim
Subject:=09FW: Mahonia X Advance Payment Guarantee Bond/Hartford Bond=09#61=
BSAP3909

I will send a copy of the letter when it arrives.

 -----Original Message-----
From: =09"Phil Bair" <pbair@jwortham.com <mailto:pbair@jwortham.com>>@ENRON=
 =20
Sent:=09Friday, November 09, 2001 2:56 PM
To:=09Bouillion, James L.
Subject:=09Mahonia X Advance Payment Guarantee Bond/Hartford Bond=09#61BSAP=
3909

Jim-On the last advance payment bond we executed in December 2000, Hartford=
 participated at a limit of $52.8 million.  A separate and specific indemni=
ty agreement was executed by Enron in favor of Hartford which contains a tr=
igger collateral call event for 100% security in the form of a letter of cr=
edit if the credit rating of Enron falls below BBB or Baa2.  (There is an o=
ption to have the bond terminated in lieu of posting a LOC, but I doubt if =
that is a viable alternative).  Hartford called today and indicated with th=
e downgrade this morning by Moody's, we are now at the edge of the trigger =
event.  They are sending a letter to the attention of your general counsel =
confirming this condition  in the indemnity agreement.  I've asked them to =
send me a telefax of the letter, which I will forward to you.  This is not =
a call for collateral at this point; Hartford simply wants to reinforce the=
 potential requirement.  I'm sending a copy of this to Joe Deffner so he wi=
ll know what is transpiring if he gets a call.

Call if you have any questions.  Thanks.

Philip N. Bair
713-346-1378 (Telephone)
713-520-1260 (Telefax)
pbair@jwortham.com <mailto:pbair@jwortham.com>
c..williams@enron.com