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A bid bond is issued to the owner of a project (typically the SPV), as part of a supply bidding process, to provide assurance  that the winning bidder will undertake the contract under the terms at which they bid. The bond is subject to full or partial forfeiture if the…

In project finance, usually the fee paid by the sponsor(s) of a project to the lender(s) acting as Mandated Lead Arranger(s) in return for structuring, documenting and syndicating the necessary loan facilities. From this fee the Mandated Lead Arranger(s) will typically pay Participation Fees to the lenders joining the transaction…

The ratio of Cashflow Available for Debt Service to interest payments and loan repayments in a given period. The most commonly used ratio for the sculpting and stress-testing of debt service payments and the setting / testing of cashflow-based covenants.

With regard to loans, amortisation is the process of reducing the size of the loan by making scheduled repayments of principal (as opposed to the interest due on the loan outstandings). The amortisation schedule is thus the agreed series of repayments built into the loan agreement. In accounting, amortisation is…

Where a construction contractor receives an advance payment (often in the range of 10-20% of contract price) he will frequently be required to post a Bond for the same amount by way of security until the amount of work represented by the payment has been carried out. The bond will…