Q: What is the LSP Decommissioning Surety Bond?
A: The LSP Surety Bond is a financial guarantee that is issued by our Surety on behalf of your company guaranteeing the licensing agency that funds, in an amount equal to your funding requirement, are in place to decommission your licensed site. If the bond is called, the Surety pays the licensing agency and recovers the bond amount from your company
Q: Do we have to pledge assets to secure an LSP Surety Bond?
A: No. The LSP Surety Bond is issued on an unsecured basis using your company’s financial strength, experience and corporate indemnification
Q: How difficult is it to qualify for an LSP Surety Bond?
A: The application process is simple. Applying requires the completion of a simple questionnaire, the exchange of two years of financial statements plus this year’s most recent interims, a copy of your Material Licensee application, (NRC Form 313 or state equivalent) and a copy of your most current Decommissioning Cost Estimate if your FA amount exceeds $1,125,000
Q: How long does the process take?
A: Two weeks, beginning to end
Q: Is my company able to change the Financial Assurance method at any time?
A: Yes
Q: How does an LSP Decommissioning Surety Bond differ from a Letter of Credit?
A: 1. Your bank issues an LOC using pledged liquid assets as collateral which appears on your financials as a contingent liability reducing your line of credit and reducing your borrowing capacity
2. LSP underwriters issue a Decommissioning Surety Bond on an unsecured basis using your company’s financial strength, experience and corporate indemnification as an off-balance sheet transaction without diminishing your line of credit and leaving your borrowing capacity unaffected
Q: Can we free up our pledged assets if we replace our Letter of Credit with an LSP Decommissioning Surety Bond?
A: Yes. The LSP Decommissioning Surety Bond is issued on an unsecured basis using your company’s financial strength, experience and corporate indemnification instead of pledged assets. Using company assets as collateral is unnecessary
Q: Will replacing our Letter of Credit with LSP’s Surety Bond affect my balance sheet?
A: Yes, positively. Unlike with your Letter of Credit, LSP’s Surety Bond is an off-balance sheet transaction and is not considered a contingent liability
Q: Will buying an LSP Surety Bond affect my line of credit?
A: Yes, positively. Unlike with your Letter of Credit that has diminished your borrowing power, the LSP Surety Bond is not treated as a liability and when replacing a Letter of Credit, acts as a form of credit enhancement
