Standby Letters of Credit for ERCOT and PUCT
Financely issues Letters of Credit (LCs) on your behalf. We hold deposits with several reputable U.S. banks. This enables you to meet stringent regulatory requirements without tying up your capital, ensuring more cash is available for your operations and growth.
WE POST COLLATERAL
Our Solution
Financely holds deposits with various U.S. banks to issue Letters of Credit (LCs) for small utility companies needing to meet ERCOT and Public Utility Commission of Texas's financial security requirements.
Our guarantee fund allows companies to issue standby letters of credit without tying up 100% cash reserve, providing them with the flexibility to maintain operational efficiency and growth.
Letter of Credit Issuance Procedure
Standby Letters of Credit are issued within 5 to 10 business days for routine transactions.
Step 1: Apply for a Quote
Apply for a quote provide all the necessary information about your standby letter of credit (SLOC) needs.
Step 2: Access the Client Portal
Once we receive your application, we grant you access to our client portal where you can track the progress of your application.
Step 3: Collateral Posting
We underwrite your deal and post up to 80% of the required collateral. You will need to post the remaining 20% into a Special Purpose Entity (SPE) account.
Step 4: Issuance of the Letter of Credit
The letter of credit is issued to ERCOT, PUCT, or another state beneficiary on your company's behalf through one of the banks holding our deposits.
FAQs
To start, please request a quote by providing all necessary information about your standby letter of credit (SLOC) needs.
What is the maximum amount for a Letter of Credit (LC)?
The maximum amount for a Letter of Credit can be up to $3,000,000 USD.
Which banks issue the Letters of Credit?
We have accounts at Chase, Credit Suisse, HSBC, and China Construction Bank, which issue the Letters of Credit.
How much collateral do I need to provide?
You need to provide 20% of the LC amount as collateral. We will post the remaining 80%. The annual fee is usually 10% on your 20% collateral deposit, which amounts to only 2% of the gross LC amount. This is much lower compared to the 6-10% you would typically pay to a bank.
Legal Disclaimer
The information provided on this page is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any financial products or services. Financely’s Guarantee Facility for issuing Letters of Credit (LCs) to meet ERCOT and PUCT compliance requirements involves financial and operational considerations. Prospective clients should carefully evaluate these factors and consult with their own legal, tax, accounting, and financial advisors before utilizing our services.
ERCOT and PUCT regulations require market participants to provide financial security to ensure compliance and operational stability. Financely has raised capital and deposited it with various U.S. banks, including Chase, Credit Suisse, HSBC, and China Construction Bank, to facilitate the issuance of these LCs. The issuance of Letters of Credit is contingent upon approval by these banks. In the event that a bank refuses to issue a Letter of Credit, Financely will refund the client’s deposit in full.
Clients are responsible for ensuring they meet all ERCOT and PUCT regulatory requirements and should not rely solely on the information provided herein. All fees, collateral requirements, and terms mentioned on this page are subject to change at Financely’s discretion. The actual terms and conditions will be outlined in the formal agreements provided upon application approval.
By accessing or using the information on this page, you acknowledge that you have read, understood, and agree to be bound by this disclaimer.
For more detailed information on ERCOT’s financial security requirements and compliance guidelines, please refer to ERCOT’s Credit Application and Financial Security Documents. Additionally, it is advisable to stay updated with the Public Utility Commission of Texas (PUCT) regulations which can be reviewed here.
About Us
Popular Services
Contact Information
To get started with us please Submit Your Deal Here.
Financely connects growth-oriented businesses with investors seeking premium opportunities, effectively bridging the gap between capital demand and supply. While we are not a securities broker or dealer, we collaborate with investment banks, legal counsel, and other professionals as needed. We do not offer to buy or sell securities and disclaim liability for capital-raising results.
Get in Touch
Financely Inc. is a corporate finance consulting firm wholly owned by Aurora Bay Trust, a Bahamas established Trust, or its relevant authorized affiliates. Our advisory business is carried out through Financely Group LLC, a non-banking financial company (NBFC) that does not accept deposits from the public. We do not operate as a securities broker/dealer. Please read our terms of service to determine if working with Financely Group is appropriate for you. Pursuant to the Dodd-Frank Act, we operate as an exempt
foreign private adviser in the United States, exempt from certain regulatory requirements.