12
20.
made up
billion
In
this case, project debt, which is assumed to be
primarily of syndicated loans, is maximized at $37
at money of the day prices and Government paid-up
equity is fixed at $16.6 billion. Wardley have advised that
they believe $37 billion to be the maximum amount which
could be supported for this project, having regard to -
(a) the level of debt which can be supported by
the predicted cashflows; and
(b)
to the amount of debt available in the market
in view of the scale of the project and the
fact that lenders are unlikely to accept
repayment periods in excess of twelve years.
21.
the
Wardley have also advised that they consider that
minimum debt service cover ratio* of 1.37,
of 1.37, as derived
in the "base case", will provide lenders with the necessary
assurance that the AA will have sufficient resources at all
times to meet its debt service obligations. With this in
mind, they have advised that it will be feasible to maximize
project debt at $37 billion if certain measures are taken to
enhance the capacity of the AA to service debt. These are
-
* Footnote the debt service cover ratio in any period is Net cashflow before financing + cash balances Principal repayments + interest payments + financing fees due