ERCOT Market Participation Letter of Credit

If you trade power, you post financial assurance. We coordinate market participation Letters of Credit that meet credit department requirements, use acceptable issuing banks, and stay clean through renewals, substitutions, and amendments.

We structure and coordinate Letters of Credit used as collateral for market participation, including ERCOT and other ISO and RTO frameworks where LCs are accepted as credit support. Scope covers credit file readiness, issuing bank placement, LC text drafting, notice and evergreen mechanics, delivery workflow, and ongoing monitoring. Outcome is a compliant LC that supports your trading activity without operational surprises.

Scope of Services

Structuring

  • Credit support mapping to your market participation requirement and deadline
  • Issuing bank selection aligned to acceptance standards and jurisdiction comfort
  • Tenor and evergreen mechanics designed to avoid gaps in coverage
  • Collateral approach: cash margin, secured line usage, or other approved support

Commercials

  • Fee pathing based on LC size, tenor, and issuer risk
  • Margin and collateral expectations set upfront, no surprises after underwriting
  • Replacement and increase mechanics planned for growth in posted amounts
  • Renewal playbook to reduce last-minute credit pressure

Documentation

  • LC text drafting to meet required wording and draw mechanics
  • SWIFT MT7xx workflow coordination and confirmation of delivery steps
  • Amendments, increases, reductions, and cancellations coordinated end to end
  • KYC, sanctions checks, and signatory evidence pack for issuing bank onboarding

Controls

  • Submission workflow built to match the market credit department process
  • Discrepancy prevention and pre-clear of language before issuance
  • Tracking for expiry, notice periods, and evergreen triggers
  • Post-issuance monitoring through renewal, replacement, or release

Structures We Coordinate

  • Market participation LC issued under required rule set and format
  • Evergreen LC structures designed to prevent coverage gaps
  • LC increases for growing exposure and expanded trading limits
  • Replacement and substitution workflow to change issuers without disruption
  • Partial releases and reductions aligned to credit department approvals
  • Multi-market support where you post collateral across more than one venue
  • Operational playbook for renewals, amendments, and document conformity

Eligibility and Dossier

Minimums

  • LC face value typically from USD 250,000, smaller reviewed case by case
  • Tenor commonly structured as 12 months with renewal mechanics as required
  • Acceptable applicant credit profile or supported collateral plan
  • Clean KYC with transparent ownership and acceptable jurisdictions

Core Dossier

  • Applicant KYC, ownership chart, corporate documents, and signatory proof
  • Last two years financials plus trailing twelve month management accounts
  • Market participation details and required collateral amount and deadline
  • Required LC wording or credit department template, if available
  • Existing banking coordinates and any posted collateral or credit support history

Process

Intake

Mandate signed, KYC received, requirement confirmed, and deadline locked. We identify the quickest path that still meets acceptance standards.

Terming

Issuer path, collateral expectations, tenor, and notice mechanics agreed. We issue indicative terms and the exact checklist for issuance readiness.

Drafting

LC language drafted to match required wording and draw mechanics. We clear comments early so the issued LC does not get rejected for format issues.

Issuance and Submission

LC issued via SWIFT workflow and delivered through the required submission path. We confirm receipt and handle any immediate corrections or amendments.

Monitoring

We track expiry, notice periods, and renewal triggers. If you need increases, substitutions, or releases, we run the amendment workflow end to end.

Pricing Guidance

  • Issuing bank fees and any interest depend on size, tenor, and applicant risk
  • Collateralization level drives economics and speed to issuance
  • Amendments, increases, and substitutions may carry bank charges
  • Arrangement retainer from USD 59,500 based on scope and urgency
  • Success fee 2.5% of issued amount at closing unless agreed otherwise
  • Bank, legal, and courier costs passed at cost

Final economics depend on applicant credit, jurisdiction, required wording, tenor mechanics, and the collateral plan accepted by the issuing bank.

Request Indicative Terms

Share the required LC wording, posted amount, deadline, and your corporate KYC pack. We respond with eligibility, a fee path, and the fastest route to issuance.

Include the market participation requirement notice if you have it, plus your latest financials and ownership details. We act as advisor and arranger and coordinate issuance through partner banks and regulated counterparties.

Request A Quote

All transactions are subject to KYC and AML, sanctions checks, credit approvals, document conformity, and signed agreements. No offer of securities is made.

Financely acts as advisor and arranger. We are not a bank and do not take deposits. LC issuance depends on bank approvals, document compliance, and counterparty performance. Nothing here is a guarantee of issuance, acceptance, or trading eligibility.