What Are Financial Instruments?

Overview

In the context of the AggregateEU platform for demand aggregation and the joint purchase of natural gas, buyers and sellers will assess the credit worthiness of their potential counterparts to, as relevant, ensure the due payment of the natural gas purchase price or secure (financially) the delivery of gas. The parties will generally request some instruments to mitigate the commercial risk of non-payment or non-delivery.

For subscription to the AggregateEU service, you are invited to specify (i) whether your company has already been assigned credit ratings and (ii) which instrument(s) you will be in a position to provide to your counterpart for the potential negotiation and final conclusion of the gas sale and purchase agreement. This will happen outside the AggregateEU platform. 

If you do not have yet secured any of the instruments listed below, we strongly advise you to contact your local commercial bank as soon as possible.

Financial Instruments

1. Credit ratings

Your company has been assigned an investment grade Credit Rating (ie at least BBB-/Baa3 or equivalent) by one or several major credit ratings agencies.
-> Select "Credit rating (BBB- or above)"

2. How do you intend to finance and/or guarantee the payment of the purchase price (as buyer) or to secure financially the delivery of the gas (as seller)?

The options set out below have been identified to provide the parties with an overview of the profile of potential counterparts. The actual instruments necessary to finalise the purchase and delivery of gas will be negotiated by the parties during potential negotiation and final conclusion of the gas sales and purchase agreement. This will happen outside the AggregateEU platform.

Options (where relevant - you may choose several options):

• Guarantee options:
  • Standby letter of credit (SBLC) issued by a first class public or private financial institution (or other form of first demand bank guarantees
    
    
  • Guarantee issued by a parent company with an investment grade credit rating (ie at least BBB-/Baa3 or equivalent)
    
    
  • Collateral over cash or cash equivalent
    
    
  • Collateral over other types of debt securities
    
    
  • Credit support annex to be signed by the parties
    
    
• Financing options:
  
  • Letter of credit issued by a first class public or private financial institution
    
    
  • Prepayment (including by drawing on credit lines provided by one or several first class public or private financial institution)
    
    
• Others
  • Transfer of the transaction to a clearing house and/or a broker
    
    
  • Currently in discussions with financial institutions

In this article, you will find more information about potential support from public financial institutions and how to contact them.