TOOL 4.1
| Legal counterparty | • The party to whom we have the legal right to ask repayment from |
| Examples | • Borrower i.e. The party to whom we lend the money, provide the facility or on whose behalf we make a commitment • Guarantor • Parties to a contract assigned to the bank e.g. ‒ Offtakes ‒ Insurers ‒ Guarantors / credit default swap counterparties |
| Credit base(s) | • All of the parties that need to stay in good financial health during the life of the facility so that it is repaid/matures/expires in accordance with the agreed amortisation schedule |
| Examples | • The whole group. (Remember to consider Associates/Affiliates where they represent a large investment or have close business ties with the rest of the group) • Shareholders. How much control do they have? What is their ability/desire to inject cash or to extract cash through dividends, fees etc.? • Major suppliers, buyers, off takers (contracted buyers in a project finance) where there is concentration/dependence. |
