A-2 P3 A-/BBB+/BBB Baa3/Ba1/Ba2/Ba3 A-3 NP B1/B2/B3/Caa1/Caa2/ BBB/BBB- Caa3/Ca/C B BB+/BB/BB- C B+ / B / B- / CCC+ / C CCC / CCC- / CC / D D Equivalent ratings from other rating agencies may also be considered. If the short-term rating is noted as being under a credit watch with negative implications, CAISO will use the next lowest long-term equivalent rating for its assessment. For example, if a Market Participant has a Moody’s short-term rating of P1 and is under credit watch with negative implications, an equivalent long-term rating of Baa1 will be used for the assessment; i.e., the next lowest equivalent rating. Rating agency reports, particularly credit ratings, are reviewed and updated minimally on a quarterly basis for those Market Participants with an Unsecured Credit Limit. They are also reviewed as needed if questions arise as to changes to a Market Participant’s financial health and/or credit standing. Additionally, credit rating agency reports of downgrade/upgrades are reviewed upon notice from a rating agency to determine if the Unsecured Credit Limit should be correspondingly decreased/increased. 1.11 Qualitative and Quantitative Credit Strength Indicators As provided in Section 12.1.1 of the CAISO Tariff, CAISO may rely on information gathered from financial reporting agencies, the general/financial/energy press, and provided by the Market Participant to assess an entity’s overall financial health and its ability to meet its financial obligations. Information considered by CAISO in this process may include the qualitative factors noted in FERC’s Policy Statement on Electric Creditworthiness1 : a) Applicant’s history; b) Nature of organization and operating environment; c) Management; d) Contractual obligations; e) Governance policies;
A-2 A-/BBB+/BBB P3 Baa3/Ba1/Ba2/Ba3 A-3 BBB/BBB- NP B1/B2/B3/Caa1/Caa2/ Caa3/Ca/C B BB+/BB/BB- C B+ / B / B- / CCC+ / CCC / CCC- / CC / C D D Equivalent ratings from other rating agencies may also be considered. If the short-term rating is noted as being under a credit watch with negative implications, CAISO will use the next lowest long-term equivalent rating for its assessment. For example, if a Market Participant has a Moody’s short-term rating of P1 and is under credit watch with negative implications, an equivalent long-term rating of Baa1 will be used for the assessment; i.e., the next lowest equivalent rating. Rating agency reports, particularly credit ratings, are reviewed and updated minimally on a quarterly basis for those Market Participants with an Unsecured Credit Limit. They are also reviewed as needed if questions arise as to changes to a Market Participant’s financial health and/or credit standing. Additionally, credit rating agency reports of downgrade/upgrades are reviewed upon notice from a rating agency to determine if the Unsecured Credit Limit should be correspondingly decreased/increased. 1.11 Qualitative and Quantitative Credit Strength Indicators As provided in Section 12.1.1 of the CAISO Tariff, CAISO may rely on information gathered from financial reporting agencies, the general/financial/energy press, and provided by the Market Participant to assess an entity’s overall financial health and its ability to meet its financial obligations. Information considered by CAISO in this process may include the qualitative factors noted in FERC’s Policy Statement on Electric Creditworthiness1 : a) Applicant’s history; b) Nature of organization and operating environment; c) Management; d) Contractual obligations; e) Governance policies;
Credit_Mgmt_version_3_Redline.docx