Document ID: chunk:federal_register_of_legislation:F2024L01074:body:0:p60
Version: federal_register_of_legislation:F2024L01074
Segment Type: other
Provision Reference: 
Character Range: 181649–188680

relationships with leasing agents and other parties providing important real estate services.                                                                                                                                                                                                   Poor relationships with leasing agents and/or other parties providing important real estate services.
Security package
Nature of lien                                                  Perfected first lien.                                                                                                                                                                                                                                                                               Perfected first lien.                                                                                                                                                                                                                                                                                        Perfected first lien.                                                                                                                                                                                                                                                                                    Ability of lender to foreclose is constrained.
Assignment of rents (for projects leased to long-term tenants)  The lender has obtained an assignment. They maintain current tenant information that would facilitate providing notice to remit rents directly to the lender, such as a current rent roll and copies of the project's leases.                                                                       The lender has obtained an assignment. They maintain current tenant information that would facilitate providing notice to the tenants to remit rents directly to the lender, such as current rent roll and copies of the project's leases.                                                                   The lender has obtained an assignment. They maintain current tenant information that would facilitate providing notice to the tenants to remit rents directly to the lender, such as current rent roll and copies of the project's leases.                                                               The lender has not obtained an assignment of the leases or has not maintained the information necessary to readily provide notice to the building's tenants.
Quality of the insurance coverage                               Appropriate.                                                                                                                                                                                                                                                                                        Appropriate.                                                                                                                                                                                                                                                                                                 Appropriate.                                                                                                                                                                                                                                                                                             Sub-standard.

 1.         Slotting criteria for object finance exposures
                                                                                                                                  Strong                                                                                                                                                                                         Good                                                                                                                                                                                     Satisfactory                                                                                                                                                                              Weak
Financial Strength
Market Conditions                                                                                                                 Demand is strong and growing. There are strong entry barriers and low sensitivity to changes in technology and economic outlook.                                                               Demand is strong and stable. There are some entry barriers and some sensitivity to changes in technology and economic outlook.                                                           Demand is adequate and the entry barriers are limited and stable. There is significant sensitivity to changes in technology and economic outlook.                                         Demand is weak and declining, vulnerable to changes in technology and economic outlook and a highly uncertain environment.
Financial ratios (debt service coverage ratio and LVR)                                                                            The financial ratios are strong considering the type of asset. Very robust economic assumptions.                                                                                               The financial ratios are strong/acceptable considering the type of asset. Robust project economic assumptions.                                                                           The financial ratios are standard for the asset type.                                                                                                                                     The financial ratios are aggressive considering the type of asset.
Stress analysis                                                                                                                   Long-term revenues are stable and capable of withstanding severely stressed conditions through an economic cycle.                                                                              Short-term revenues are satisfactory. The loan can withstand some financial adversity. Default is only likely under severe economic conditions.                                          Short-term revenues are uncertain. Cash flows are vulnerable to stresses that are not uncommon through an economic cycle. The loan may default in a normal downturn.                      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