Document ID: chunk:federal_register_of_legislation:F2024L01074:body:0:p56
Version: federal_register_of_legislation:F2024L01074
Segment Type: other
Provision Reference: 
Character Range: 161015–166904

generally sold on an organised market.
Supply risk
Price, volume and transportation risk of feed-stocks; supplier's track record and financial strength                                                      There is a long-term supply contract with a supplier of excellent financial standing.                                                                                                      There is a long-term supply contract with a supplier of good financial standing.                                                                                        There is a long-term supply contract with a supplier of good financial standing – a degree of price risk may remain.                                           There is a short-term supply contract, or long-term contract with a financially weak supplier –price risk definitely remains.
Reserve risks (e.g. natural resource development)                                                                                                         Reserves are independently audited, proven and developed and are well in excess of requirements over lifetime of the project.                                                              Reserves are independently audited, proven and developed and are in excess of requirements over lifetime of the project.                                                Reserves are proven and can supply the project adequately through the maturity of the debt.                                                                    The project relies to some extent on potential and undeveloped reserves.
Strength of sponsor
Sponsor's track record, financial strength and country/sector experience                                                                                  The sponsor is strong with an excellent track record and high financial standing.                                                                                                          The sponsor is good with a satisfactory track record and good financial standing.                                                                                       The sponsor is adequate with an adequate track record and good financial standing.                                                                             The sponsor is weak with a questionable/no track record and/or financial weaknesses.
Sponsor support, as evidenced by equity, ownership clause and incentive to inject additional cash if necessary                                            Strong. The project is highly strategic for the sponsor (core business – long-term strategy).                                                                                              Good. The project is strategic for the sponsor (core business – long-term strategy).                                                                                    Acceptable. The project is considered important for the sponsor (core business).                                                                               Limited. The project is not key to the sponsor's long-term strategy or core business.
Security package
Assignment of contracts and accounts                                                                                                                      Fully comprehensive.                                                                                                                                                                       Comprehensive.                                                                                                                                                          Acceptable.                                                                                                                                                    Weak.
Pledge of assets, taking into account quality, value and liquidity of assets                                                                              First perfected security interest in all project assets, contracts, permits and accounts necessary to run the project.                                                                     Perfected security interest in all project assets, contracts, permits and accounts necessary to run the project.                                                        Acceptable security interest in all project assets, contracts, permits and accounts necessary to run the project.                                              Little security or collateral for lenders; weak negative pledge clause.
Lender's control over cash flow (e.g. cash sweeps, independent escrow accounts)                                                                           Strong.                                                                                                                                                                                    Satisfactory.                                                                                                                                                           Fair.                                                                                                                                                          Weak.
Strength of the covenant package (mandatory prepayments, payment deferrals, payment cascade, dividend restrictions, etc)                                  The covenant package is strong for this type of project. The project may issue no additional debt.                                                                                         The covenant package is satisfactory for this type of project. The project may issue extremely limited additional debt.                                                 The covenant package is fair for this type of project. The project may issue limited additional debt.                                                          The