Subject: Letters of Credit; Preference; Swap Transactions
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 25 May 2001 20:47:00 -0700 (PDT)

Julia sent me a copy of your memo following up on one of the questions asked at the session earlier this week.  I would like to ask a follow-up question:

Do we lose the benefit of the special treatment under the bankruptcy code when we enter into cross-product (i.e. physical and financial products) netting and joint credit support arrangements.  If we agree with a counterparty to net all of our trading exposures under multiple agreements (swap agreements and gas, power, steel, coal, etc. trading agreements) to determine how much credit support should be posted and then only ask for a single LC that supports the whole shebang, do we lose this protection since arguably we are no longer just "under a swap agreement?"