Company: HVIIR
Filing Date: 2025-12-23
Form Type: S-4
Source: 0001493152-25-029121
Chunk: 96

Company: Hennessy Capital Investment Corp. VII
Filing Date: 2025-12-23
Form: S-4
Chunk 96
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 which may lead to a reduction in liquidity and an increase in bad debt expense. Credit risk is comprised of numerous factors including the price of products and services provided, the overall economy and local economies in the geographic areas ONE Nuclear serves, including local unemployment rates.

Credit risk also includes the risk that various counterparties that owe ONE Nuclear money or products will breach their obligations. Should the counterparties to these arrangements fail to perform, ONE Nuclear may be forced to enter into alternative arrangements. In that event, ONE Nuclear’s financial results could be adversely affected and it could incur losses.

One alternative available to address counterparty credit risk is to transact on liquid commodity exchanges. The credit risk is then socialized through the exchange central clearinghouse function. While exchanges do remove counterparty credit risk, all participants are subject to margin requirements, which create an additional need for liquidity to post margin as exchange positions change value daily. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires broad clearing of financial swap transactions through a central counterparty, which could lead to additional margin requirements that would impact ONE Nuclear’s liquidity. However, ONE Nuclear may take advantage of an exception to mandatory clearing afforded to commercial end-users who are not classified as a major swap participant, thereby allowing such commercial end-users to enter into uncleared bilateral swaps to hedge their exposure to commercial risk.

ONE Nuclear may at times have direct credit exposure in its short-term wholesale and commodity trading activity to various financial institutions trading for their own accounts or issuing collateral support on behalf of other counterparties. ONE Nuclear may also have some indirect credit exposure due to participation in organized markets, such as SPP, PJM and the Midcontinent Independent System Operator (“MISO”), in which any credit losses are socialized to all market participants.

ONE Nuclear may have additional indirect credit exposures to various domestic and foreign financial institutions in the form of letters of credit provided as security by power suppliers under various long-term physical purchased power contracts. If any of the credit ratings of the letter of credit issuers were to drop below the designated investment grade rating stipulated in the underlying long-term purchased power contracts, the supplier would need to replace that security with an acceptable substitute. If the security were not replaced, the party could be in technical default under the contract, which would enable ONE Nuclear to exercise its contractual rights.

ONE Nuclear may face physical site risks, including severe weather events, environmental conditions, or other disasters which could result in an interruption of its operations, a delay in the completion of its power