To access the payment performance (PP) unsecured credit allowance (UCA), a retailer must have at least 6 months of settlement charges (P1 or R1) including all reconciliation balances (R1, R2, R3, R4 & RF) paid to terms. The level of unsecured credit allowance discount is two-tiered:
- A 10% discount (equivalent to 5 days of wholesale charge) offered for 6 months or more settlement to terms of settlement charges and reconciliation balances
- A 20% discount (equivalent to 10 days of wholesale charge) offered for 12 months or more settlement to terms of settlement charges and reconciliation balances
Credit worthiness grade
For the purposes of this Agreement means the Contracting Retailer holds a Top Tier Credit Rating from at least two of the three Nominated Credit Reference Agencies and no less than a Second Tier Credit Rating from the one remaining agency of the three Nominated Credit Reference Agencies.
Investment grade status
For the purposes of this Agreement means: a credit rating by one of the following credit rating agencies: Standard & Poor’s, Fitch, or Moody’s within the following listed credit grades.
Or direct or indirect majority ownership or control by the government of an EU member state, the government of a member state of the European Economic Area, the UK Government (or any devolved administration of the foregoing including the devolved Scottish, Welsh and Northern Ireland administrations);
Limited time and value
The Contracting Retailer shall not be required to provide any Eligible Credit Support to the Contracting Wholesaler in respect of its payment obligations under the Wholesale Contract on the first ten thousand pounds (£10,000) (such sum being the “Credit Limit”). The Alternative Credit Support arrangement provided by this Agreement is only available to the Contracting Retailer for a maximum period of twelve (12) months from the Effective Date of the Wholesale Contract and is not renewable in any circumstances.
Details of existing agreements can be found here.
Please get in touch with your Southern Water Key Account Manager if you would like to know more.
Alternative Credit Support Agreements