I.
ESTABLISHMENT OF THE MINIMUM PREMIUM RATES
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18.
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19.
The Participants may provide official support at or above the minimum premium rate provided that all the conditions below are fulfilled:
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20.
For purposes of Article 19 of this Appendix:
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21.
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22.
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23.
As of the entry into force of this Sector Understanding, the RBRs are:
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24.
The RBRs rates shall be reset on an annual basis, based on 4-year moving average of the annual Moody's Loss Given Default (LGD). The appropriate LGD for this reset is based on the 1st Lien Senior Secured Bank Loans, and shall be calculated as follows:
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25.
A RBR adjustment factor shall be determined as follows:
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26.
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27.
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28.
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29.
For each risk category, a Market Reflective Surcharge shall be calculated as follows:
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30.
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31.
The MCS spreads shall be discounted by 50 % to account for the asset-security. The MCS discounted spreads shall then be adjusted by a blend factor ranging from 70 % to 35 % as per Table 4 below, applied on the difference between the MCS discounted spreads and the RBR. Any negative spreads resulting from the blending shall not be deducted.
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32.
The MRS shall be updated on a quarterly basis, as follows:
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33.
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34.
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35.
In order to determine the minimum premium rates:
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36.
The applicable minimum premium rates as of the initial effective date of this Sector Understanding (
1 February 2011
) are set out in Table 5 below.
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II.
REDUCTIONS OF THE MINIMUM PREMIUM
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37.
Subject to the provisions of Article 38 of this Appendix, a reduction of the minimum premium rates established in accordance with sub-Section I above shall be allowed if:
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38.
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39.
In order to be included on the Cape Town List, a State shall:
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40.
To qualify under Article 37 of this Appendix, a territorial unit shall:
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41.
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42.
Any Participant or non-Participant which provides official support for aircraft may propose to the Secretariat the addition of a State to the Cape Town List. Such proposal shall include, with respect to such State:
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43.
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44.
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45.
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46.
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47.
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48.
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49.
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50.
If no agreement is reached during Period 2, the Chairman of the Participants to this Sector Understanding (hereafter ‘the Chairman’) will make her/his best efforts to facilitate a consensus between the Participants, within twenty working days (‘Period 3’) immediately following Period 2. If at the end of Period 3, no consensus is reached, a final resolution shall be achieved through the following procedures:
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51.
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52.
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53.
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54.
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55.
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56.
For new and used aircraft, the following adjustments to the applicable minimum premium rates may be applied:
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