Financial Rating Clause Samples

Financial Rating. The Company shall have (i) obtained a rating for the Notes of not less than BBB from S&P and Baa2 from Moody's and (ii) delivered to you financial rating letters fr▇▇ ▇▇▇h of S&P and Moody's evidencing such ratings.

Financial Rating. 2.1 It is important that consideration is given to the financial status of both the Contractor and the group to which the Contractor is a subsidiary company (if appropriate). Assessment of the group may be more pertinent given that it is common for groups to move funds out of financially strong subsidiaries to parts of the group that are in financial difficulty. Further, if a Guarantee is put in place then the financial status of the Guarantor may also need to be monitored. 2.2 Credit rating hurdles are specified in the Part C and should not be subject to negotiation, except in exceptional circumstances and after informing HMT/OGC Supplier Relations Division. 2.3 The schedule should also define the Contractor's financial position at the start of the project by reference to a credit rating. If the Contractor does not have a published credit rating (not all companies do), the Authority will have to measure the financial health of the Contractor either by commissioning an independent private rating or by reference to some agreed financial ratios (further guidance on the use of independent private ratings is due to be produced later in 2006). Financial ratios, if used, will be drawn, in the first instance, from the most recent published accounts of the Contractor (or the Contractor's holding group company, as appropriate) at the time of contract award and will be certified by the Contractor's auditors. Such financial ratios will include Net Total Interest Cover Ratio, the Total Net Debt to Earnings (EBITDA) Ratio or the Free Cash Flow Debt Service Ratio. 2.4 Where financial ratios, are required the hurdle levels for each ratio can only be set on a company by company basis at the appropriate time (either at contract award or subsequently if the Contractor ceases to have a credit rating). The Authority will need expert financial advice to specify these ratio hurdle rates and the effect of the hurdle rates should be that they are a reasonable proxy for each of the credit rating hurdles. 2.5 Where ratios are required, the Authority should ask the OGC whether the Contractor has agreed similar ratios under any other contract with HMG within the last [6 months]. In this case, the Authority's financial advisor should determine whether these hurdles are still appropriate in current trading conditions. Similarly, when the Authority has completed the negotiation of the ratio hurdles, it should notify the OGC so that other Authorities might benefit from this work.

Financial Rating. The insurance required pursuant to this Section shall be carried with insurance companies with an A.M. Best’s rating of A-VII or better.