Chapter 12

Lenders’ Cash-Flow Controls, Security and Enforcement

§12.1 Introduction

This chapter looks at how the financial structuring and hedging issues discussed in the last two chapters feed through to the lenders’ documentation, and in particular:

• how the lenders control the Project Company’s cash flow (§12.2);

• the nature of the lenders’ legal security (§12.3);

• the rôle of insurance (§12.4);

• default procedures (§12.5); and

• relationships between different classes of lenders (§12.6).

These are largely issues between the lenders and the Project Company (and its investors), but the Public Authority will need to review the lenders’ documentation to ensure that there are no provisions which weaken or unduly inhibit the Project Company’s ...

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