ISDA®

INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION

NEWS RELEASE

For Immediate Release Monday, October 28, 2002

For More Information, Please Contact:

Stacy Carey, ISDA New York, (212) 901-6000; Fax (212) 901-6001; scarey@isda.org

ISDA PUBLISHES 2002 ENERGY AGREEMENT BRIDGE

NEW YORK, Monday, October 28, 2002 - The International Swaps and Derivatives Association (ISDA) today announced publication of the 2002 ISDA Energy Agreement Bridge. The Energy Bridge and Commentary can be accessed under the What’s New section of ISDA’s web site.

The Energy Bridge, which is based on the 2001 ISDA Cross-Agreement Bridge, is intended to provide parties to the 1992 ISDA Master Agreement with a means to achieve a form of cross-product netting. Parties who have signed an ISDA Master Agreement will be able to use the Energy Bridge with a broad range of other industry-standard master agreements, whether or not those agreements are designed exclusively for use in the energy markets.

“The 2002 ISDA Energy Agreement Bridge now provides global energy derivatives market participants with a simple three page, legally enforceable cross-product netting solution,” said Robert G. Pickel, Executive Director and CEO of ISDA.

The 2002 ISDA Energy Agreement Bridge enables parties, upon the occurrence of certain events under any one of a variety of industry-standard agreements (including the ISDA Master Agreement), to terminate transactions documented under each of those agreements and to incorporate the net close-out amounts calculated in respect of transactions documented under industry-standard agreements other than the ISDA Master Agreement within the close-out provisions of their ISDA Master Agreement. "The ISDA Energy Bridge provides another tool to realize broader netting in energy trading markets," said Christophe Chassard, Managing Director, RWE Trading UK Ltd and Co-Chair of ISDA’s European Energy and Developing Products Committee.

Using the Energy Bridge in an existing ISDA Master Agreement may offer parties significant advantages: it makes use of the ISDA Master Agreement's close-out netting provisions, which are supported by an extensive and well respected library of netting opinions; it may offer, in many jurisdictions, a more robust way of achieving a form of cross-product netting; and the Energy Bridge can be easily incorporated into a new ISDA Master Agreement or by way of a single amendment without the need to negotiate a separate agreement.

“ISDA has produced a streamlined document designed to enable parties to margin trading exposures across transaction and product types, said Steve Bunkin, Vice-President and Associate General Counsel at Goldman Sachs & Co. and Co-Chair of ISDA’s North American Energy and Developing Products Committee. “The Energy Agreement Bridge will be useful to energy derivative market participants seeking to reduce cross-product transaction risk and achieve critical risk management objectives.”

The Energy Bridge keeps the agreements between the parties essentially separate from each other, and simply places the close-out mechanics of the ISDA Master Agreement between the parties "on top" of the specified Bridged Agreements if a Bridging Event is triggered. It is also expected that, in most jurisdictions, this approach will minimize the insolvency, regulatory and tax implications of using the Energy Bridge. Nevertheless, parties should consider the implications of using the Energy Bridge in consultation with their advisors.

ISDA is the global trade association representing leading participants in the privately negotiated derivatives industry. ISDA was chartered in 1985, and today has more than 590 member institutions from 46 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.

^®ISDA is a registered trademark of the International Swaps & Derivatives Association, Inc.

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