Have or have a parent company with an investment-grade credit rating from the following national credit rating organizations: Standard & Services Poor’s (S&P), Moody’s Investor (Moody’s), Fitch Ratings (Fitch) and have an Expected Default Frequency (EDF) equivalent of S&P/Moody’s credit rating of at least investment grade. The lowest rating should be investment grade. The table below lists the current maximum unsecured credit limit structure for the Transmission Business: Department’s Maximum Unsecured Credit Limit(1) Category $5,000,000 Investment Grade $2,000,000 Non-Rated Subsidiary with Parent Guaranty $1,000,000 Non-Rated Internal Scored(2) $0 Non-Investment Grade (1) Limits are not to exceed 1.00% of the most equity. counterparty’s recent owner’s/stockholder’s (2) Internal Scores are derived from assessments of the financial strength and corresponding ability to pay on a timely basis. Once a credit limit has been reached no additional sales may be made until payment or additional credit assurance is received. If at any time a Transmission Customer fails to pay unsecured amounts owed to LADWP, the credit limit is reduced to zero. 2.2 Credit Enhancements Credit enhancements will be required from Transmission Customers that do not meet the Minimum Creditworthiness Standards for Unsecured Credit or are exceeding their credit limits can come in any one of the following forms: an irrevocable letter of credit issued by a financial institution acceptable to the Transmission Provider and possess a credit rating of at least A3 by and A- by S&P and/or Fitch Moody’s a payment (parent) guarantee issued by an investment rated parent company or other obligor not to exceed 1% of most recent guarantor’s in pre-approved payment (parent) guarantee stockholders’ equity language (Exhibit 3) an escrow trust account a surety/performance bond a prepayment of at least ten days prior to transmission service and no interest will be paid thereon 2.3 Amount of Enhancement The amount of enhancement will be equivalent to the lesser of the amount of the total
Have or have a parent company with an investment-grade credit rating from the following national credit rating organizations: Standard & Poor’s (S&P), Moody’s Investor Services (Moody’s), Fitch Ratings (Fitch) and have an Expected Default Frequency (EDF) equivalent of S&P/Moody’s credit rating of at least investment grade. The lowest rating should be investment grade. The table below lists the current maximum unsecured credit limit structure for the Department’s Transmission Business: Category Maximum Unsecured Credit Limit(1) Investment Grade $5,000,000 Non-Rated Subsidiary with Parent Guaranty $2,000,000 Non-Rated Internal Scored(2) $1,000,000 Non-Investment Grade $0 (1) Limits are not to exceed 1.00% of the counterparty’s most recent owner’s/stockholder’s equity. (2) Internal Scores are derived from assessments of the financial strength and corresponding ability to pay on a timely basis. Once a credit limit has been reached no additional sales may be made until payment or additional credit assurance is received. If at any time a Transmission Customer fails to pay unsecured amounts owed to LADWP, the credit limit is reduced to zero. 2.2 Credit Enhancements Credit enhancements will be required from Transmission Customers that do not meet the Minimum Creditworthiness Standards for Unsecured Credit or are exceeding their credit limits can come in any one of the following forms: an irrevocable letter of credit issued by a financial institution acceptable to the Transmission Provider and possess a credit rating of at least A3 by Moody’s and A- by S&P and/or Fitch a payment (parent) guarantee issued by an investment rated parent company or other obligor not to exceed 1% of guarantor’s most recent stockholders’ equity in pre-approved payment (parent) guarantee language (Exhibit 3) an escrow trust account a surety/performance bond a prepayment of at least ten days prior to transmission service and no interest will be paid thereon 2.3 Amount of Enhancement The amount of enhancement will be equivalent to the lesser of the amount of the total