text_combined: mg russian prepayment exposure commodities impact concs mike jordan ect 07 27 2000 03 39 shona wilson na enron enron cc sally beck hou ect ect brent price hou ect ect subject mg russian prepayment exposure interesting information floating detailed review work tim says lot way mg business think ny ask questions prepayments exist philip bacon seemed uncomfortable need dash prepayment contract add absence credit people ny may issues although marcelo others stressed fact concentrates appeared move product without letter credit often discounted realise cash shona also discuss legal contract issue another comment yesterday philip concentrates contracts unique whilst accept may tailored customer preferences still need cacsed look enforceability legal risk whilst information prepayment risk metals come london accessing relevent inofrmation ny may helpful call later forwarded mike jordan lon ect 27 07 2000 09 33 tim poullain patterson 26 07 2000 21 53 eric gadd lon ect ect goran novakovic lon ect ect robert quick lon ect ect david hardy lon ect ect mike jordan lon ect ect justin boyd lon ect ect howard carter metal commodity co ltd mgltd mgltd cc richard sage lon ect ect diana higgins lon ect ect fernley dyson lon ect ect steve w young lon ect ect bjorn hagelmann hou ect ect david p tregar mgltd _ london mgltd mgltd subject mg russian prepayment exposure situation present follows mg nine open contracts four counterparties sourcing mainly copper russian federation prepayment basis contracts floating price basis lme less discount notional value contract circa 0 5 3 mm prepayment unsecured trade finance basis 90 95 value balance exchange title evidenced documents issues break three broad areas 1 commercial present enron engage prepayment activities russian federation counterparties prepayments permitted rac performed dash activity likely take several weeks howard liase commercial manage issues existing prepayment counterparties arising suspension howard david hardy also take immediate steps manage existing prepayment exposures 2 legal based cursory review confirmations robert continue activity legal need instructed perform full review several reasons including confirmations contain ambiguous language concerning basic economic terms e g pricing date light mechanics prepayments generally constructed appropriate way type activity conditions purchase attached confirmations refer english law always countersigned conflict rules closest real connection may deemed russian law absence properly executed agreement raises concerns enforceability several open contracts volumetric shortfalls beyond delivery period could considered discharged breach confirmation contain adequate language 3 credit operational formal counterparty limits prepayment volumetric exposures tracked contract contract basis information necessarily ensure transparency contract performance needs factored overall credit monitoring process david requested information mg follow one exercise introducing spreadsheet workaround enable us track exposures based methodology developed helsinki work required quantify exposures demonstrate despite issues identified contractual terms performance contracts david pursuing credit perspective report back group findings friday latest issues raised regarding contractual language suggest need accelerate planned review contract language mg activities jurisdictions mike discuss bringing review forward justin questions please call regards tim