26.5  Transfer of senior debt obligations

In certain circumstances, government may reserve the right (in its absolute discretion) to, in lieu of paying out senior debt, have the obligations to repay senior debt transferred to it.  This may arise (without limitation) in circumstances, for example, where the hedges are "out of the money" and government would prefer not to bear the break costs of early termination.

Accordingly, if government so determines, the Termination Payment made by government to the private party will exclude any amounts that would otherwise be payable with respect to the transferred senior debt.

The amount of senior debt transferred to government will be less any deductions government would otherwise be able to make under section 26.3.2.