Glossary

A contractual agreement for the sale to a buyer of physical goods or other assets – most often encountered in the project financing field in the context of LNG. SPAs are the usual method for the long-term sale of LNG and frequently incorporate take-or-pay provisions.

A form of financing facility where a Borrower who repays an amount borrowed under the facility will have the right to draw that amount again. Revolving credits contrast with Term Loans, which have a drawdown period and repayment period. Amounts repaid under a term loan structure are not available for…

A Control Account. The account which is opened in the name of the Borrower in the books of the agent bank for a transaction into which are paid the proceeds of sale of the project’s output. Also known as a Proceeds Account.

A form of surety provided by a contractor so as to avoid deductions (retentions) being made from the milestone payments under a construction contract. Thus rather than receiving 90% of a stage payment due to him when a milestone is passed (with the other 10% being payable at completion of…

A form of lending against petroleum reserves which uses some aspects of project finance structuring (notably discounted cashflow of Cashflow Available For Debt Service) but which: a) is not structured as a Term Loan; and b) is not specifically dedicated to the development of particular petroleum assets. RBL facilities are…

Clauses in project financing agreements where the Borrower – and potentially also the Sponsor(s) – confirm the accuracy and sufficiency of information or assurances provided to the lenders. Certain representations and warranties are deemed to be repeated at each drawdown or roll-over of a loan. If it can be shown…

A state-appointed individual or body with oversight powers in industries such as gas, water and electricity generation / distribution – where the services are provided by one supplier (e.g. a power grid operator) or a very limited number of suppliers. The role of the regulator usually includes ensuring that monopoly…

The ratio of the net present value of CFADS during the remaining project life to the amount of the loan which is still outstanding at the time the calculation is made. Much used in the sculpting of debt capacity in upstream oil &gas lending, but also used as an additional…

The commercial contracts and other agreements relating to a project to which the lenders are NOT party and which have been identified as “Project Documents” in the loan and security agreements. Once a document has been classified as such, it will be impacted by provisions in the loan documents, including…

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