FAQs
Applications
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FAQ-218:
Why are there two letters of credit?
There is a single pre-bid letter of credit, posted under the “Pre-Bid Credit Document” section on the Information – Documents page. In the Part 2 Application, each Qualified Bidder is required to post pre-bid security in an amount of $500,000 per tranche of the indicative offer at the maximum starting price using this pre-bid letter of credit or in the form of cash. Bidders may be required to provide additional pre-bid security. Please refer to Section IV.2.9 of the CPB Rules for more information regarding the pre-bid security requirement.Additionally, there is a letter of credit that can be used to post collateral under the terms of the Master SSO Supply Agreement Documents . This letter of credit, the SSO Supplier Letter of Credit, is posted under the “Master SSO Supply Agreement Documents” section on the Information – Documents page. Please refer to Article 5 of the Master SSO Supply Agreement for details.
02/10/2020 in Applications
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FAQ-217:
We do not qualify for an unsecured credit line. If we win at the auction, what financial guarantees are required upon signing the Master SSO Supply Agreement?
The Independent Credit Requirement (ICR) per tranche is provided in Attachment C-1 of the Master SSO Supply Agreement and is $800,000 per tranche of the two-year product and $400,000 per tranche of the one-year product. A “market value” for each tranche will be determined at the close of the Auction based on the prevailing market prices, as described further in Attachment C-2 of the Master SSO Supply Agreement. The mark-to-market exposure is zero at the close of the Auction but this exposure may lead to a margin call during the term of the Master SSO Supply Agreement.Please see Article V of the Master SSO Supply Agreement for details.
10/31/2019 in Applications
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FAQ-215:
We are a bidder relying on the financial standing of a guarantor. When we participated in both the November 2018 and the March 2019 Auctions, the pre-bid security requirement for us was always $500,000/tranche. For the November 2019 Auction, we were required to provide an additional $300,000/tranche in the form of letter of intent to provide a guaranty , or in addition to a pre-bid letter of credit or cash. Can you explain the pre-bid security requirement for the November 2019 Auction?
For both the November 2018 and the March 2019 Auctions, the amount of pre-bid security required was $500,000 per tranche because there was a single product with a 12-month supply period. No additional pre-bid security was required for any bidder. For the November 2019 Auction, the amount of pre-bid security required is $800,000 per tranche because the auction includes multiple products including a product with a 24-month supply period. As stated in Paragraph IV.2.9. of the CBP Rules:- Each bidder must post a pre-bid letter of credit or cash in an amount of $500,000 per tranche of the bidder’s indicative offer at the maximum starting price;
- A bidder that relies on the financial standing of a guarantor must, in addition to a pre-bid letter of credit or cash, provide a “letter of intent to provide a guaranty” in an amount of an additional $300,000 per tranche of the bidder’s indicative offer at the maximum starting price; and
- A bidder that relies on its own financial standing and that does not have sufficient unsecured credit must submit a letter of reference in an amount of an additional $300,000 per tranche of the bidder’s indicative offer at the maximum starting price.
The form of pre-bid security required is provided to each bidder in Attachment 2 of the bidder’s Part 1 Notification. A bidder always has the option of increasing the amount of the pre-bid letter of credit or cash to $800,000 per tranche rather than providing a letter of intent to provide a guaranty or a letter of reference.
10/22/2019 in Applications
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FAQ-214:
Who can participate in a Trial Auction? When is the Trial Auction scheduled for the November 2019 Auction?
Qualified Bidders that successfully complete the Part 2 Application become Registered Bidders and receive a Part 2 Notification. With the Part 2 Notification, Registered Bidders receive an invitation to participate in a Trial Auction as well as login credentials for the Trial Auction. For the November 2019 Auction, as indicated in the Auction Timeline, bidders can expect to receive the Part 2 Notification no later than October 29. The Trial Auction is scheduled for October 30, from 11 AM to 1:30 PM.
10/22/2019 in Applications
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FAQ-208:
Can we list the same individual that was named as the Applicant’s Representative as the representative of the Guarantor in the First Item of Section 1.6?
Yes. You can list the Representative for the Applicant as the Representative for the Guarantor in the First Item of Section 1.6.
01/17/2019 in Applications
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FAQ-207:
The Applicant is relying on the financial standing of a foreign guarantor, and the required financial information is reported in the entity’s local currency. For purposes of completing the Second Item of Section 1.6, should we provide the amount of Goodwill, Shareholder’s Equity, and Net Intangible Assets in US dollars or the entity’s local currency?
Please provide the amount of Goodwill, Shareholder’s Equity, and Net Intangible Assets in the same currency as they appear in the relevant financial filings submitted in the Second Item of Section 1.6.
01/17/2019 in Applications
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FAQ-206:
The Applicant is relying on the financial standing of a foreign guarantor, and the foreign guarantor files unaudited quarterly financial information with the SEC Form 6-K. Since the quarterly financial information is unaudited, is the applicant required to provide an attestation by the Entity’s Chief Financial Officer (“CFO”) under the Second Item of Section 1.6?
No. If the quarterly financials of the foreign guarantor are filed with the SEC on the Form 6-K, the applicant does not need to provide an attestation from the guarantor’s CFO.
01/17/2019 in Applications
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FAQ-205:
The Applicant is relying on the financial standing of a foreign guarantor, and the foreign guarantor files audited annual and unaudited quarterly financial information with the SEC Form 6-K. Should the financial documents be submitted in Section 1.6 or Section 1.7 of the Part 1 Form?
Please provide the audited annual financial information, and the most recent unaudited quarterly financial information in the Second Item (Financial information) of Section 1.6 of the Part 1 Form.
01/17/2019 in Applications
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FAQ-204:
Is there a comment process for the Form of SSO Supplier Letter Of Credit for the March 2019 Auction?
There is no comment process for the Form of SSO Supplier Letter of Credit at this time. A list of acceptable modifications to the SSO Supplier Letter of Credit is posted to the CBP website and dated December 20, 2018.
01/11/2019 in Applications
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FAQ-203:
Section 8.2(a) of the Master SSO Supply Agreement requires each supplier to represent and warrant to AEP Ohio that “if organized outside the State of Ohio, [it] is qualified to conduct its business and is in good standing in Ohio”. Section 1.4 of the Part 1 Form requires each bidder to retain a Legal Representative in Ohio that is authorized and agrees to receive service of process on behalf of the bidder.For an Applicant organized outside the State of Ohio, is fulfilling the provisions from Section 1.4 of the Part 1 Form sufficient to meet the requirements in Section 8.2(a) of the Master SSO Supplier Agreement?
The provisions from Part 1.4 of the Part 1 Form regarding a bidder/supplier having a Legal Representative in Ohio that is authorized and agrees to receive service of process on behalf of the bidder are separate from and not related to whether a foreign corporation (organized outside of Ohio) has qualified itself to conduct business in Ohio and is in Good Standing. The Ohio Secretary of State can issue Certificates of Good Standing for foreign corporations after a license has been obtained. You should discuss and review these requirements with your legal counsel.You and your counsel can find more details about the requirements for foreign corporations in the Ohio Revised Code at the following link: http://codes.ohio.gov/orc/1703.
01/11/2019 in Applications
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