2.27 Decisions on the best form of financing should be left open as long as possible. This will enable the decisions to be informed by conditions in the financial markets that are, barring unforeseen events, likely to apply when the financing is finalised at the time the contract is let. If a decision on the form of financing is taken too early then there is a greater risk that conditions in the financial markets will change before the contract is let in ways which will result in the form of financing that was chosen earlier no longer being optimal.
2.28 In this deal, signing of the contract was not achieved in October 1999 as MOD had expected, but instead was completed in May 2000. Having initially delayed the decision on the financing route as long as possible before endorsing Modus' choice of bank financing in June 1999, MOD then found itself exposed to increasing finance costs and changes in the cost of bank finance relative to bond finance during the delayed deal closure. It decided to continue with bank finance as it saw no clear durable advantage from changing the financing arrangements. It also considered that there continued to be strong qualitative arguments for using bank finance.