Respondents are required to provide two options for the potential early repayment of either a portion of, or all of, Project Co's debt after Final Acceptance. It is at the discretion of the State to exercise either of the early debt repayment options and there are no conditions associated with any such State election. For the purposes of providing these options, Respondents should assume that:
• Option 1:
- the State will provide an additional capital contribution on the date of a scheduled refinancing;
- the additional capital contribution will not be made any earlier than three years post Final Acceptance;
- the additional capital contribution will be sized such that there is [$#] million of debt remaining in Project Co; and
- the capital component of the Service Payment will step down following receipt of this capital contribution.
• Option 2:
- the State will provide an additional capital contribution on the date of a scheduled refinancing;
- the additional capital contribution will not be made any earlier than three years post Final Acceptance;
- the additional capital contribution will be sized such that there is zero debt remaining in Project Co; and
- the capital component of the Service Payment will step down following receipt of this capital contribution.
Respondents are required to provide the following information in relation to each of the early debt repayment options:
• an explanation of the Respondents' proposed approach to early debt repayment, including:
- the proposed quantum and timing of the additional capital contribution;
- an explanation of the proposed approach to re-gearing (assuming that the State does not impose any constraints in this regard);
- whether there would be any adjustment to the target equity IRR (for example, as a result of the reduced refinancing risk); and
- the impact of this on the Service Payment; and
• alternative versions of the Financial Model which incorporate the options, including a summary of changes made to each model compared to the Financial Model provided in accordance with Proposal Requirement E2.1 (Appropriateness of Financial Assumptions and Financial Model).