Terms and Conditions of Finance

For the Bidders Equity and Quasi Equity Funders the following details about any component must be provided:

•  Identity of all equity investors

•  Amounts and timings of subscriptions by each investor

•  The resulting capital structure of the Bidder following each subscription

•  Details of arrangement fees associated with the investments

•  Terms and conditions of subscriptions, especially any pre-conditions which must be satisfied before funds will be subscribed

•  Dividend rights attaching to each subscription

•  Capital redemption rights attaching to each subscription

•  Voting rights attaching to each subscription

•  Details of any shareholder agreements or other contractual arrangements between the investors relevant to their investments

•  Confirmation from each investor that the funds will be committed in accordance with the subscription details noted above, supported by a Board Minute or other authorising document and setting out clearly any conditions precedent or other qualifications

•  The terms and conditions of any subordinated debt, including the source and the amount

•  The sources of guarantees or collateral used to secure the issue of performance guarantees.

If the financing structure relies upon equity contributions to be made after financial close, the Local Authority may require parent company guarantees of that amount or other acceptable security.

Bidders are required to provide the following information for each loan facility or other debt instrument, together with a detailed timetable setting out the expected negotiation and signing of the facilities:

•  Identity of all lead arrangers and/or underwriting banks that have given indications and/or commitments and the amounts indicated or committed debt funders

•  Type of facility

•  Purpose of and any restrictions on the use of the facility

•  Currency

•  Amount and timing of the debt being made available

•  Draw-down schedule

•  Grace period

•  Details of arrangement fees associated with the investments

•  Details of any pre-conditions attaching to the draw-down debt offer

•  Repayment profile of the debt and final maturity date

•  Interest rate arrangements for the debt, i.e. margin, whether linked to Base Rates or LIBOR, whether fixed or variable, etc.

•  Any proposed hedging arrangements in respect of interest rates

•  Treatment of interest during installation (i.e. whether capitalised or not)

•  Principal financial and information covenants including details of cover ratios

•  Events of default

•  Security required, including any guarantees

•  Any contingent financial support and the parties providing it

•  Any control or reserve accounts

•  Details of contingency finance that will be available and the parties providing it, including details of how the funding arrangements could accommodate any delays in design and implementation and cost overruns

•  Details of working capital requirements and how these will be met

•  Confirmation from each debt funder that funds will be committed in accordance with the Funder Commitment Letter as set out at Appendix 10 to these Instructions, supported by term sheets prepared in accordance with the HM Treasury standard public sector PFI/PPP term sheet.

In addition, Bidders are asked to specifically identify how the contracting body will be protected from the financial failure of the Service Provider during the term of the Contract, for example through the operation of a parent company guarantee.