My judgement would say they have received a term sheet subject...

My judgement would say they have received a term sheet subject to many areas being met. This is a problem that we see what companies "go it alone".

I am by all means not saying they aren't capable of negotiating a good deal for themselves but the company is limited in its ability to play "bad" cop as they need the funds and will have a hard time trying to counter what might be some significant catches in the actual loan itself.

I haven't seen the term sheet or know what they are being offered exactly but it would be interesting to see none the less.

When I mentioned a DSCR (debt service cover ration) of 1.3x - that means that cash flows before debt repayment only need to be 1.3x the actual payment due which is quite low. This isnt a bad thing at all - Its actually one of the positives. Most of the onshore lenders are looking for 1.6x or higher which has an impact of the type of projects they are willing to lend into. 1.3x should mean the company can easily meet this requirement as long as the BFS is positive.

The only smaller guys that I can think of, off the top of my head would be someone like YTC who have been lent funds from Glencore as you have already mentioned. Agreed that this is currently a tough market.

There are plenty of smaller guys in this difficult position now (MYG, MZI are two examples), RES are a bigger beast but in the same process.

A due diligence process could last 4-6 weeks minimum and then internal credit could take that long again, depending on what questions they might have over top.

Basically the group withing the bank will put together all the documentation, the DD, the financial models etc after they feel like they can answer all of the questions the credit department will have. Then its submitted for the next level of assessment.

From start to finish these processes can take up to 6 months - I am not saying that this will happen here as I have only limited experience in the South American markets but thats an indicative time table if that process was happening domestically.

One of the biggest hurdles tends to be a completed BFS with accurate data that can stand up to questioning by a credit team.

Paul12 - I can't answer your question 100%, to me it reads more like we have an offer of credit (non binding subject to a lot more DD yet). So they are definitely closer and the process has started but my own way that I read it, is it won't be next week!