International business transactions

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  Host govt’s role in project
  
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  Progress on authorizations
  
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  Licenses, etc.
  

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  DUE DILIGENCE!!
  

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  conditions precedent
  
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  representations and warranties
  
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  affirmative covenants
  
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    obligations that borrower must do
    
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  negative covenants
  
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    what borrower must NOT do
    
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  events of default
  

obligations of a borrower continue over a period of years.

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  failure to make payment
  
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  failure to get project completed on time
  
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  failure to observe covenant
  
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  any obligor (other major project participants) filing bankruptcy petition
  
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  final judgment in excess of certain amount in lawsuit against borrower or any obligor
  
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  govt approval disappears
  
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  a party terminates or takes action to terminate a project agreement
  

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  acceleration of outstanding principal of loan together with accrued but unpaid interest
  
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  if loan is secured, foreclosure of collateral security and sell it to pay off outstanding principal of loan
  
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  refusal to lend any more money (when loans are disbursed over period)
  
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    but this may prevent project from being completed, which would prevent the revenues that are needed to pay off already disbursed loans
    

Events of default don’t always mean that remedies will be triggered. Many defaults are dealt with by negotiations  workouts

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  on one hand, lender has all legal leverage
  
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  on other hand, borrower has all practical leverage
  
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    if project doesn’t get finished, loan doesn’t get repaid