Explore our world of Structured Solutions
Pricing instability along with limited capital have made it increasingly difficult for Energy and Power companies to access the cost-effective liquidity they require to propel growth. In this environment, companies need to manage their credit requirements while controlling costs and mitigating their financial risks. These industries are ready for change.
Collateral posting requirements are costly, tie up valuable liquidity and are a poor allocation of limited capital. Structured solutions such as the On-Demand Payment Bond (‘ODP’) can replace cash or letters of credit freeing up working capital for more efficient uses and improving the overall leverage of your company.
Why Iridium?
Iridium is bringing an innovative and cost-effective solution to the Energy industry. At Iridium we have been instrumental in the development and application of structured surety. Our exclusive focus on products like the On-Demand Payment Bond (“ODP”) is coupled with dedicated professionals that not only understand every aspect of these surety products but have the knowledge and appreciation of your business operations.
Iridium can assist your company with structured surety products that can satisfy business requirements and relieve the financial pressures that come with posting obligations. Now you can redeploy your capital to maximize financial returns and better suit your needs.
Our Competitive Advantage
Financial Risk Expertise
Iridium has the expertise to negotiate and facilitate the quick approval of an ODP facility for your operations.
Transactional Experience
We have an impressive track record of successful transactions in the Energy sector.
Industry Knowledge
Our strength lies in our deep knowledge and experience in the Energy sector.
Why On-Demand Bonds?
On-Demand Bonds offer several key advantages:
Beneficiary (Obligee) is the bondholder and accepts the bond in lieu of other stand-by security or in conjunction with other collateral postings.
Improves your working Capital by reducing the capital constraints of stand-by posting obligations.
ODP Bond is supported by an Indemnity Agreement established between the shipper and the surety market (like a bank facility).
ODP Bond pays out in the same time frame as other collateral postings (5-7 days).
Priced competitively at or better than letter of credit rates.
Surety markets available are minimum “A” rating with enough capacity to meet virtually any obligation.
Reduces administrative burden and costs.
Can cover 100% of the collateral requirement.
Our Industry Focus
Our focus on the Energy and Power sectors reflects years of innovative product development. Our unique products and strategies have gained market acceptance that have assisted in maximizing financial returns while mitigating contractual risks.
ODB Application
Oil & Gas
TRANSPORTATION: Used as a stand-by security by Producers and others for Pipeline Transportation Agreements for standard or long-term firm or interruptible transportation agreements.
MIDSTREAM: Used as stand-by security.
STORAGE: Used to meet stand-by security requirements in master service agreements.
PROCESSING: Can be used to meet stand-by security requirements in master service agreements.
PRECEDENT AGREEMENTS: Used for requirements in pipeline construction and precedent agreements.
COMMODITY TRADES: Used to meet security requirements for short and long term commodity processing agreements. The producer can use the ODP as a principal when they are required to post stand-by security collateral.
Power Sector
ISO STANDARD OPERATING AGREEMENTS: The ISO Bond is an accepted alternative to posting a letter of credit for collateral obligations under standard agreements.
IESO AUCTIONS: The ODP has been accepted for collateral obligations for IESO auctions.
About Iridium Risk Services
Iridium is an industry leader in providing risk management advice and insurance solutions to companies operating in the energy, industrial and technology sectors. Iridium is part of the Navacord group of companies. With over $3 billion in annual premium, 2,000+ employees and 50,000 clients, Navacord is one of Canada’s largest insurance brokers.
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