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Payments went in a complete circle and canceled themselves out such that, in the end, the onlypayments actually made were the Principal Payment by Toronto Dominion and the Principal PlusInterest Payments by the Enron affiliate.611. No Toronto Dominion prepay actually involved the transfer of a commodity. Thatis, all the Toronto Dominion prepays were financially settled. In addition, the prepayment amountof each of the Toronto Dominion prepays depended not on the quantity of oil or gas desired or onany other business reason, but on the amount of money Enron wanted to borrow and the amount ofmoney Toronto Dominion was willing to lend. For example, in the London prepay, Enron wantedto borrow $400 million but Toronto Dominion would only lend $165 million. In the Truman prepay,a letter notes that “[t]he precise value of crude oil will be determined at the trade date in an amountsufficient to cover 100% of principal and interest.” TDB-EX 002057 (quoted in Exam. IV, App. Gat 23).612. Toronto Dominion knew the Toronto Dominion prepays were simply loans to Enron,and therefore should have been recorded as loans on Enron’s financial statements – not ascommodity trades. Toronto Dominion understood that because the prepay transactions transferredthe price risk of the underlying commodity in a circle, neither Toronto Dominion, nor the Enronaffiliate, nor the financial institution involved had any commodity price risk as part of thetransaction. See, e.g., TDB-EX 000002-03 (cited in Exam. IV, App. G at 5 n.7); TDB-EX 000020(cited in Exam. IV, App. G at 39 n.140); TDB-EX(1) 019961 (quoted in Exam. IV, App. G at 41);TDB-EX 000252 (cited in Exam. IV, App. G at 5 n.7). A Toronto Dominion employee preparedthe following chart for the Truman prepay, clearly demonstrating that Toronto Dominion understoodthe circularity of the transaction:604041v1/007457-209-