Term | Definition |
Ratios that measure the extent to which current and future liabilities to lenders are covered by available cash fows. There is a minimum Annual Debt Service Cover Ratio (ADSCR) and a Loan Life Cover Ratio (LLCR). | |
The periodic instalments of loan principal and interest, and associated fees, due from a consortium to its lending banks. | |
A rate of interest which varies periodically, in accordance with a stated market reference, usually the London Interbank Offered Rate (LIBOR). | |
An additional amount that a bank charges on a commercial loan over and above its own cost of providing the loan. The margin compensates the risk of not having the loan repaid, potentially providing a profit. | |
London Interbank Offered Rate. The interest rate at which banks will lend to each other, which became difficult to determine at times during the banking crisis. | |
The process by which the funding terms, put in place at the outset of a PFI contract, are later changed, usually with the aim of creating benefits or refinancing gains. Refinancing may be beneficial where project risk has reduced, for example, after the completion of construction. | |
The amount of capital regulators require a bank to hold in relation to its lending based on international guidance produced by the Basel Committee on Banking Supervision. | |
The market for buying and selling shares in project companies that, usually, have commenced trading. | |
An arrangement whereby a loan which has a variable rate of interest (which continually changes in relation to market rates of interest) is exchanged for a loan which has a fixed rate of interest. | |
The amount that the public body contracts to pay each month for the service being delivered. It will cover operations and maintenance, on a whole-life basis as well as the fully financed construction cost. |