Appendix 5 Reconciliation of the Exchequer Partnership Best and Final Offer to the unadjusted Ambac bid and the Unitary Payment at financial close

 

 

Unitary Payment

 

31.3.1999 Prices

 

£000

 

EP BAFO May 1999 (based on a fixed rate bond)

13,981

 

Improved debt service cover ratios and benefit of switching to an index-linked bond

(746)

 

Information Memorandum Index-Linked model

13,235

 

Further benefits of the funding competition

(228)

 

Unitary Payment for Ambac Final Bid assuming historical Interest rates and project timing

13,007

 

Ambac Final Bid

13,007

 

 

 

 

Reduction in paying agency and trustee fees

(7)

 

Agreed construction cost variations

488

 

Reductions in lifecycle costs

(20)

 

 

 

 

Unitary Payment assuming historic interest rates

13,468

 

Interest rate assumptions updated at financial close

 

 

 

 

 

Index-linked gilt reference rate 1.6% to 1.952%

 

 

Index-linked bond spread from 1.3% to 1.63%

 

 

Bond deposit account from 4.2% to 6.47%

 

 

LIBOR increase to 6.5%

569

 

 

 

 

Unitary Payment at financial close

14,037

 

 

Source: Treasury Taskforce