Document ID: chunk:federal_register_of_legislation:F2024L01074:body:0:p61
Version: federal_register_of_legislation:F2024L01074
Segment Type: other
Provision Reference: 
Character Range: 188181–194119

Revenues are subject to strong uncertainties. Even in normal economic conditions the asset may default, unless conditions improve.
Market liquidity                                                                                                                  The market is structured on a worldwide basis. Assets are highly liquid.                                                                                                                       The market is worldwide or regional. Assets are relatively liquid.                                                                                                                       The market is regional with limited prospects in the short term, implying lower liquidity.                                                                                                The market is local and/or has poor visibility. There is low or no liquidity, particularly in niche markets.
Political and legal environment
Political risk, including transfer risk                                                                                           Very low. There are strong mitigation instruments, if needed.                                                                                                                                  Low. There are satisfactory mitigation instruments, if needed.                                                                                                                           Moderate. There are fair mitigation instruments.                                                                                                                                          High. The mitigation instruments, if any, are weak.
Legal and regulatory risks                                                                                                        The jurisdiction is favourable to repossession and enforcement of contracts.                                                                                                                   The jurisdiction is favourable to repossession and enforcement of contracts.                                                                                                             The jurisdiction is generally favourable to repossession and enforcement of contracts, even if repossession might be long and/or difficult.                                               The legal and regulatory environment is poor and/or unstable. The jurisdiction may make repossession and enforcement of contracts lengthy or impossible.
Transaction characteristics
Financing term compared to the economic life of the asset                                                                         Full payout profile/minimum balloon. No grace period.                                                                                                                                          Balloon more significant, but still at satisfactory levels.                                                                                                                              Important balloon with potential grace periods.                                                                                                                                           Repayment in fine or high balloon.
Operating risk
Permits/licensing                                                                                                                 All permits have been obtained; the asset meets current and foreseeable safety regulations.                                                                                                    All permits have been obtained or are in the process of being obtained; the asset meets current and foreseeable safety regulations.                                                      Most permits have been obtained or are in the process of being obtained; outstanding ones are considered routine; the asset meets current safety regulations.                             There are problems in obtaining all required permits; part of the planned configuration and/or planned operations might need to be revised.
Scope and nature of O&M contracts                                                                                                 There is a strong long-term O&M contract, preferably with contractual performance incentives and/or O&M reserve accounts (if needed).                                                          There is a long-term O&M contract and/or O&M reserve accounts (if needed).                                                                                                               There is a limited O&M contract or O&M reserve account (if needed).                                                                                                                       There is no O&M contract and a risk of high operational cost overruns beyond mitigants.
Operator's financial strength, track record in managing the asset type and capability to re-market asset when it comes off-lease  Excellent track record and strong re-marketing capability.                                                                                                                                     Satisfactory track record and re-marketing capability.                                                                                                                                   Weak or short track record and uncertain re-marketing capability.                                                                                                                         No or unknown track record and inability to re‑market the asset.
Asset characteristics
Configuration, size, design and maintenance (e.g. age, size for a plane) compared to other assets on the same market              There is a strong advantage in design and maintenance. Configuration is standard such that the