What is Credit Default?

Under the BSC arrangements, Trading Charges for a given Settlement Day are, on average, due to be paid 29 days later. This means that Parties will always have approximately 29 days of accrued Trading Charges which are yet to be paid.

Parties lodge collateral with Elexon to cover these charges should the Party become unable to pay. Credit Default occurs when a Party’s yet-to-be-paid charges exceed 80% of its collateral.


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