1.36 One of the main benefits of the competition was that the project agreement signed in August 1999 between Exchequer Partnership and the Treasury was unaltered by the funders. This meant that the risk allocation between the Treasury and Exchequer Partnership remained unchanged during the funding competition. Draft agreements between a department and a contractor are often amended once a funder undertakes due diligence work, usually because the funder raises concerns over the allocation of project risks. The project agreement between the Treasury and Exchequer Partnership was altered only by technical changes to reflect the specific needs of bond funding and agreed variations to the project specification.
1.37 The final capital structure of the deal was also within the range of possible structures envisaged at the start of the competition. Senior debt provided 90.6% of the funding, mezzanine debt provided 4.4% with the remaining 5% being supplied by Exchequer Partnership's shareholders in the form of subordinated debt and equity.
1.38 Box 2 explains the different elements of financing that were being competed for. The price obtained for each of these elements and whether this was good value is set out below.