Principles of Project Finance

enforcement action if the agent bank or security trustee does not do so

once a notice of default has been issued, especially if the default is caused

by nonpayment.

The main practical problem with any voting arrangement is that usually a bank

lending as a relatively small participants in a syndicate does not want to be both-

ered with voting on small issues: for most banks, this means the loan officer hav-

ing to prepare and explain a paper on the issue to the bank’s credit department, and

for a minor or technical waiver this is not a very productive use of the loan officer’s

time. Therefore, actually getting banks to vote at all is difficult. As a result, if the

hurdles for voting majorities on day-to-day amendments and waivers are set too

high, the Project ...