2.6  Rolled up Interest

2.6.1  The financial effect of the UC ramp up is that the Contractor receives less revenue at a time when its borrowing commitments are at their greatest so interest on these borrowings cannot be paid from cashflow but needs to be rolled up into the loan outstanding. This effect is particularly pronounced on schemes with long interim phases such as housing schemes, as full UC payments can be deferred for several years and more interest needs to be rolled up into the debt facilities. The Model provides for this period to extend up to a maximum of 5 years.