Message-ID: <13257589.1075844569426.JavaMail.evans@thyme> Date: Tue, 26 Sep 2000 04:44:00 -0700 (PDT) From: sara.shackleton@enron.com To: melissa.murphy@enron.com Subject: Draft term sheet for oil-power spread option pruchase from FPL Cc: robert.bruce@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: robert.bruce@enron.com X-From: Sara Shackleton X-To: Melissa Ann Murphy X-cc: Robert Bruce X-bcc: X-Folder: \Sara_Shackleton_Dec2000_June2001_1\Notes Folders\Sent X-Origin: SHACKLETON-S X-FileName: sshackle.nsf Melissa: It looks like we'll need GTC's for a yet to be named FP&L counterparty to do this daily call option (spread). Credit (Ed Sacks) knows about this deal. You may want to think about the format. Have we done this before? Did you work on the Moosehead (Merrill Lynch) deal? Sara ----- Forwarded by Sara Shackleton/HOU/ECT on 09/26/2000 11:40 AM ----- Janice R Moore 09/26/2000 10:13 AM To: Sara Shackleton/HOU/ECT@ECT cc: Joe Gordon/Corp/Enron@Enron, Edward Sacks/Corp/Enron@Enron, Edward D Baughman/HOU/ECT@ECT Subject: Draft term sheet for oil-power spread option pruchase from FPL Further to my voicemail, here's the deal that John Llodra is trying to present today. As I mentioned, I didn't get any definitive answers this a.m., but I think this deal has to be documented on an ISDA or ISDA-like form. Let me know if I can help. Regards, Janice EB3861 Assistant General Counsel, Enron North America Corp. 713-853-1794 (Fax: 713-646-4842) ----- Forwarded by Janice R Moore/HOU/ECT on 09/26/2000 10:05 AM ----- John Llodra@ENRON 09/25/2000 10:31 PM To: Mark Dana Davis/HOU/ECT@ECT, Edward D Baughman/HOU/ECT@ECT, Paul J Broderick/HOU/ECT@ECT, Pearce W Hammond/Corp/Enron@ENRON, Joe Gordon/Corp/Enron@Enron, Janice R Moore/HOU/ECT@ECT, Edward Sacks/Corp/Enron@Enron cc: Subject: Draft term sheet for oil-power spread option pruchase from FPL All: Attached is a draft of a term sheet for a financial resid-power spread option purchase by EPMI from FPL for NEPOOL. I am hoping to share this term sheet with the customer sometime early-mid afternoon on Tuesday 9/26, so I'd appreciate any comments you all might have. I will be out of the office in the morning at a customer meeting, but will be available by cell 978-314-5614 or pager 877-246-3206 (i'll be in the car for a good 3-4 hours between 8 AM-2 PM Eastern traveling to and from the mtg). If you have trouble reaching me, please feel free to go through Joe Gordon at 5-8956; Joe is an Associate newly assigned to the Northeast mid-market team (Joe will only be around in the AM though). Some specific points I'd like to raise: Oil price index/curve -- Pearce Hammond (structuring) and I spoke with Dave Botchlett (our resid trader) Monday about: (1) the most appropriate resid oil index to use; and (2) the "correct" resid curve consistent with that index. Dave did not sufficiently answer these two questions, so I called Paul Racicot and asked him what he thought. Paul suggested using the Platts Daily New York Harbor Resid Cargo Mean index (which i've included in the term sheet attached), as that was probably the most hedegable index. Other alternitives that I am aware of include Platts Daily New York Harbor Barge Mean and perhaps others. We have the daily option to "dispatch" the energy or not, so I think we want to use a daily oil index rather than a first of the month index, etc. Paul Broderick - do you have any thoughts on this? Assuming the Cargo Mean is the right index, we then need to make sure the resid curve we use is consistent with that index. Pearce - could you perhaps connect with Dana/Paul Broderick/Ed Baughman/Joe Gordon to see if we can come to aggreement on index and appropriate curve. Resid-power coorelation -- Dana - what coorelation do you want to assume; Pearce, please connect with Dana to confirm that number. Janice/Ed -- if it's not evident, this proposed transaction is with the unregulated marketing sub of Florida Power & Light, not the regulated utility. We have done other trades with this entity so I'm assuming we're all set with Master Agreement, etc. Does our basic Master cover financial structures like the one outlined in the attached? Any comments/feedback you have would be much appreciated. Thanks Regards John