The Financial Model must include the following schedules:
• a statement of the sources and uses of funds during the Development Phase;
• funding schedules for each form of finance setting out drawdowns, interest accrued (and capitalised if applicable), repayment amounts and timing;
• projected statement of financial performance for the Term;
• projected statement of financial position for the Term;
• a cash cascade for the Term showing the priority of the distribution of cash flows, as set out in the finance documents. This should include the priority of payments to reserve accounts, senior debt, mezzanine/subordinated debt, individual Services Contractors etc.;
• cash flow, balance sheet and income statement for any securitisation vehicle or other finance company (if relevant);
• debt service reserve account(s) for the Term;
• maintenance reserve account(s) for the Term;
• standby facilities for the Term;
• any other reserve accounts for the Term;
• projected taxation schedule (this should specifically show taxable income/(loss) for each period, cumulative tax losses (if any), losses utilised in a given period, and tax paid in the period);
• a depreciation schedule for the Term; and
• a Model Output Schedule containing all information required to update the State Project Documents at Financial Close.
The Financial Model must show a summary of each individual element of the cash cascade, on a nominal and NPV basis, including (but not limited to):
• revenues;
• operating costs (including lifecycle maintenance costs);
• movements in working capital;
• tax payments (including movements in GST cash flows);
• movements in reserve accounts (including maintenance and debt service reserves);
• financing drawdowns (for both debt and equity) and payments of interest and principal;
• distributions to equity (including subordinated and mezzanine debt); and
• movements in cash balances.
The Financial Model must produce the following outputs:
• internal rate of return (IRR) before financing and tax in both real and nominal terms;
• finance the return on equity and subordinated debt - and where subordinated debt is to be invested, a blended return - in real and nominal terms, and on a pre and post entity-tax basis. The calculations of returns must be on a contribution basis using the profile of equity or subordinated debt cashflows to be contributed to, and received from, the Project. In addition, Respondents may also calculate these returns in the Financial Model on a commitment basis;
• the gearing ratio at Commercial Acceptance;
• [the gearing ratio and internal rate of return (IRR) to date immediately following payment of the [#State Contribution / #State Contributions] and any refinancing or release of reserves or contingencies or other support;]
• the weighted average cost of capital;
• average debt service coverage ratio (DSCR) and loan life coverage ratio (LLCR) for each period of each loan and in aggregate with minimum and average ratios (calculated in accordance with the term sheet);
• the average life of senior debt;
• any other ratios which are considered relevant to the proposed financial structure;
• the precise timing of any equity injections and details of the phasing if appropriate (including equity bridging facilities);
• NPV of nominal and real Service Payment assuming no abatement deductions;
• development (set-up) and bid costs analysis (pre Financial Close) itemising each bid cost, as well as details of all other Financial Close costs; and
• details of any provisional sums.