Category

Glossary

Glossary
November 23, 2021

Negative Pledge

A provision in a contract which prohibits a party to the contract from creating any security interests over certain property specified in the provision. Negative pledges often appear in project finance security documents, where they operate to prohibit the person who is granting the security interest from creating any other…
Steve Mills
Glossary
November 22, 2021

Multilateral Agency

An international organisation owned by three or more countries which exists to encourage the development of productive private enterprise through the provision of financing, guarantees and other support mechanisms. Examples are the International Finance Corporation (IFC) - a member of the World Bank Group -  the African Development Bank and…
Steve Mills
Glossary
November 17, 2021

Loss Payee Clause

A loss payee clause (or loss payable clause) is a clause in a contract of insurance that provides, in the event of payment being made under the policy in relation to the insured risk, that payment will be made to a third party rather than to the insured beneficiary of…
Steve Mills
Glossary
November 16, 2021

Loan Market Association (LMA)

The Loan Market Association (LMA) was formed in December 1996 and is based in London, UK. Its initial aim was to assist in the development of the secondary loan market in Europe, which was in its infancy at that time. Its intention was to develop industry best practice and standard…
Steve Mills
Glossary
November 15, 2021

Loan Life Cover Ratio (LLCR)

The ratio of the net present value of CFADS during the remaining loan life to the amount of the loan which is still outstanding at the time the calculation is made. A common ratio for the sculpting of debt and the setting / testing of covenants in minerals-based project transactions, such as…
Steve Mills
Glossary
November 12, 2021

Liquidated Damages (LDs)

A fixed level of damages payable to the project company/SPV– typically by a construction or operation & maintenance contractor – as a result of the contractor failing to meet contractual obligations. In the case of a construction contractor these will typically be Delay LDs and / or Performance LDs. An…
Steve Mills
Glossary
November 11, 2021

Limited-Recourse Loan

In a project financed structure, the Sponsors will not normally be under any obligation to provide further financing support to the SPV once they have injected their base Equity. The Lenders are therefore said to have limited recourse to the balance sheets of the Sponsors. In practice it is common…
Steve Mills
Glossary
November 10, 2021

Know Your Customer (KYC)

Know your customer, alternatively known as know your client or simply KYC, is the process of a business verifying the identity of its clients and assessing their suitability, along with the potential risks of illegal intentions towards the business relationship. The term is also used to refer to the bank…
Steve Mills
Glossary
November 9, 2021

Joint Implementation (JI)

One of three flexibility mechanisms set out in the Kyoto Protocol to help countries with binding greenhouse gas emissions targets (the Annex I countries) meet their treaty obligations.
Steve Mills