Key Issues

6.  It is important to note that refinancings are highly complex and need to be analysed carefully in line with the guidance issued by HM Treasury/OGC (see page 15). Key issues associated with any refinancing which will require careful consideration by the Department include:

•  Authority consent;

•  Exemptions;

•  Calculation of the MOD's share of the refinancing gain;

•  Method of receipt of the MOD's share of the refinancing gain;

•  Impact of the refinancing on termination liabilities;

•  Separation of the refinancing from other commercial changes which may be included in a refinancing proposal;

•  Assessment of the level of senior debt sustainable by the SPV;

•  Value for money assessments;

•  Approvals;

•  Audit Rights; and

•  Reimbursement of advisors costs associated with the refinancing.