Contractual risks of housing estate-financing project loans
In the midst of the financial crisis, emphasis has been put on the debt service, particularly
in relation to housing estate-financing loans. This paper examines the significance
of the creditors’ risk awareness and as well, the importance of the project finance
debtors’ cautiousness about their contractual commitments.
The first and foremost commitment of the debtor is the fulfilment of the interest
payment plus the debt amount in due time. However, within the eligible contractual
framework, special commitments (such as representations and warranties, negative and
affirmative covenants, etc.) can be made. These should be considered reasonably by
both parties.