policy-rails-and-control-matrix - MediaHedge Underwriting Knowledgebase

# Policy and Control Guide > [!warning] Evidence Limitation > The figures below are described in the available material as MediaHedge film-policy limits. The material does not provide a policy version, approval date or effective date. Verify current authority before applying them to a transaction. ## Quantitative Rails | Rail | Stated treatment | Purpose | | --- | --- | --- | | [[wiki/concepts/tax-credit-collateral\|Tax-credit advance]] | No more than 85% of verified eligible tax-credit value | Cushion for audit, timing, transfer and monetization risk | | [[wiki/concepts/gap-collateral\|Gap advance]] | No more than 50% of supported low value | Limits exposure to market-dependent unsold-rights value | | [[wiki/concepts/gap-collateral\|Gap concentration]] | Generally no more than 30% of actual final gross loan | Prevents gap risk from dominating repayment | | Aggregate LTV | No more than 60% | Caps total exposure relative to eligible value | | Gross loan-to-budget | No more than 80% | Limits lender exposure relative to production budget | | Term | Generally no longer than 15 months | Aligns maturity with realistic collection timing and liquidity | | [[wiki/concepts/loan-sizing\|Commitment]] | Lowest amount permitted by all applicable constraints | Ensures the tightest structural ceiling controls | ## Non-Quantitative Gates | Gate | Required finding | Primary evidence | If not satisfied | | --- | --- | --- | --- | | [[wiki/concepts/full-financing\|Full financing]] | Verified, timely sources and committed equity cover all uses through delivery, financing costs, reserves and contingency | Executed commitments, funded equity, approved budget, cash-flow schedule, closing statement | Do not close; restructure sources/uses or reduce exposure | | Eligibility | Collateral is owned, enforceable, supported, non-duplicative and collectible on the modeled timeline | Contracts, schedules, opinions, obligor diligence and valuation evidence | Exclude or haircut; do not cure with price | | [[wiki/concepts/pre-sales-collateral\|Contracted pre-sale]] | The minimum guarantee is final, authorized, deliverable, collectible and assignable for the eligible net amount | Executed agreement, delivery terms, obligor diligence, accepted assignment and deduction schedule | Exclude conditional or unsupported value; resolve contract and control gaps | | [[wiki/concepts/gap-collateral\|Gap evidence]] | Unsold rights are owned and available, and the supported low case survives concentration and timing stress | Rights schedule, chain of title, sales-agent authority, territory support, comparable sales and stress model | Exclude unsupported value or reduce the gap component | | [[wiki/concepts/security-package\|Security and priority]] | Correct grant, perfection, assignment, acknowledgment and control method applies to each asset | Searches, releases, filings, control agreements, recordation and counsel analysis | Hold funding or condition use of proceeds | | [[wiki/concepts/cash-control-and-waterfalls\|Cash control]] | Every payer and currency has a controlled destination, priority and reconciliation process | Payment directions, CAMA, control agreement, bank onboarding and test reconciliation | Remediate before relying on proceeds | | [[wiki/concepts/protection-stack\|Completion, surety and insurance]] | Each instrument covers the intended risk, parties and amount, and its conditions align with the approved budget, contract and delivery specification | Policies, endorsements, final guaranties or bonds, underlying contracts and premium evidence | Correct the instrument or remove the credited protection | | [[wiki/concepts/monitoring-and-servicing\|Monitoring]] | Baseline, data, triggers, authority and continuity are operational at closing | Servicing plan, calendar, data dictionary, consent matrix and custody plan | Do not treat reporting promises as controls | ## Failure-Mode Control Matrix | Failure mode | Preventive control | Detection signal | Response path | | --- | --- | --- | --- | | Budget or schedule overrun | Full financing, contingency, overage allocation, draw control | Cost-to-complete or schedule variance | Pause draw, cure plan, reserve, guarantor action, protective-advance test | | Delivery dispute | Objective delivery requirements, cure and notice rights | Rejection, missed milestone or aging receivable | Cure, expert/arbitration, preserve contract and claims | | Tax-credit reduction or delay | Eligible-spend model, haircut, filing covenants | Spend migration, audit finding, missed filing or long-stop variance | Reforecast, reserve, specialist/counsel action, alternate liquidity | | Obligor nonpayment | Credit diligence, assignment, payment control, setoff analysis | Invoice aging, downgrade, dispute or missed payment | Demand, claim, cure, litigation or settlement | | Cash diversion | Source mapping, payment direction, controlled account and waterfall | Bank-to-ledger mismatch or unauthorized change | Block account, suspend junior payments, reserve and enforce | | Collateral shortfall | Conservative sizing and dynamic borrowing base | Coverage or concentration breach | Paydown, additional collateral, reserve, extension, sale or enforcement | | Servicer failure | Custody, audit, data portability and backup servicing | Service-level breach, missing records or reconciliation failure | Cure, replace servicer, transition data and authority | ## Controls That Cannot Substitute for One Another - Higher coupon cannot cure ineligible collateral. - Aggregate LTV cannot cure correlated or legally unreachable value. - A [[wiki/concepts/cash-control-and-waterfalls|CAMA]] cannot substitute for Article 9 account control. - A [[wiki/concepts/security-package|UCC filing]] cannot substitute for asset-specific attachment, control, recordation or counterparty rights. - [[wiki/concepts/production-insurance|Insurance]] cannot substitute for [[wiki/concepts/full-financing|Full Financing]] or a [[wiki/concepts/completion-protection|completion guaranty]]. - A completion guaranty cannot substitute for obligor, [[wiki/concepts/tax-credit-collateral|tax-credit]] or commercial-value underwriting. - [[wiki/concepts/surety-credit-protection|Surety protection]] cannot substitute for completion, collateral eligibility or compliance with the bonded obligation and claim process. - More reports cannot substitute for [[wiki/concepts/monitoring-and-servicing|verified evidence, triggers and decision authority]]. ## Evidence and Limitations These figures are useful for understanding the stated framework, but they are not a certification of current policy. Review [[wiki/evidence-and-limitations|Evidence and Limitations]] before applying them to a financing decision. ## Continue Exploring [[MediaHedge Knowledgebase|Home]] · [[wiki/syntheses/financier-diligence-route|Financier’s Guide]] · [[wiki/concepts/loan-sizing|Loan Sizing]]