Lender Diligence Authority Reconstruction
Acceptance Authority Reconstruction Under Lender Scrutiny
Context of Scrutiny
A mid-sized EPC program entered refinancing discussions eighteen months after mechanical completion. Operational performance remained within tolerance, but lenders requested structured review of completion certification and acceptance authority across major work packages to assess contingent exposure risk.
No active dispute was present. Scrutiny was capital-driven.
Reconstruction Scope
Reconstruction covered:
• Milestone acceptance certificates
• Conditional completion records
• Delegated approval thresholds
• Escalation documentation
• Change order sequencing
Focus was placed on identifying where operational acceptance diverged from contractual authority bands.
Authority Gaps Identified
Review identified multiple conditional completions exercised within delegated field limits but without cumulative exposure aggregation tracking.
Escalation thresholds had been triggered individually but not evaluated collectively across parallel scopes.
Acceptance attribution was technically documented but commercially diffuse.
No procedural breach occurred. Authority alignment lacked consolidation.
Financial Sensitivity Observed
Lender sensitivity modeling applied a 1.6 to 4.8 percent valuation adjustment band tied to the reconstructed acceptance uncertainty.
The adjustment reflected authority ambiguity under scrutiny not reflection of performance deficiency.
The projected debt service coverage remained acceptable, but the valuation tolerance narrowed.
Determination Outcome
The structured reconstruction clarified the escalation lineage and consolidated conditional exposure tracking.
Documentation alignment reduced modeled sensitivity to below 1.2 percent.
Refinancing proceeded without a retained liability expansion.