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

# Policy and Control Guide Use this guide to connect collateral evidence, transaction-specific sizing and authorized decisions through closing and servicing. A review trigger, a mandatory limit and a funding condition have different consequences. > [!warning] Policy Review Pending > The qualitative framework was reconciled with current owner-approved underwriting guidance on September 30, 2026. Transaction-specific mandates, numerical assumptions and delegated exception authority still require verification; this page does not certify a financing. > > The reader website summarizes the controls qualitatively. The intentionally public GitHub repository and its history also contain legacy internal briefs and numerical examples; those are historical evidence, not a statement of current approved policy. Current approved policy and executed transaction documents govern each financing. ## Sizing and Exposure Controls | Control | Public Decision Framework | Purpose | | --- | --- | --- | | [[wiki/concepts/tax-credit-collateral\|Tax-credit advance]] | Apply the current asset-specific rule to verified eligible value | Cushions audit, timing, transfer and monetization risk | | [[wiki/concepts/gap-collateral\|Gap advance]] | Apply the current asset-specific rule to a supported low case | Limits exposure to market-dependent unsold-rights value | | [[wiki/concepts/gap-collateral\|Gap concentration]] | Require explicit concentration analysis; distinguish a review trigger from a mandatory mandate limit | Prevents uncertain or correlated value from dominating repayment | | Aggregate leverage | Apply approved transaction and mandate requirements to eligible value on a stated valuation base | Caps total exposure relative to supportable collateral | | Budget exposure | Set the approved capital structure and test net production cash and full financing | Limits lender exposure relative to production uses | | Term and liquidity | Align maturity, reserves and extension capacity with stressed collection timing | Protects against timing mismatch and liquidity shortfalls | | [[wiki/concepts/loan-sizing\|Commitment]] | Amount satisfying approved limits, completion needs and authorized conditions | Keeps mandatory limits distinct from review triggers | ## Decision Sequence and Funding Channels Screen the project, issue indicative terms and refine them during diligence. Verify collateral and net completion cash; model base, downside and stress cases; form separate Risk and Obligor Scores; recommend structure and pricing; obtain authorized approval; then classify the approved rate as MH Score and Tier. Documentary closing and actual funding are later, distinct events. Institutional eligibility is assessed by facility or tranche. Eligible contracted receivables and incentives do not make a project's gap, sales-estimate or other excluded portion eligible. Completion protection does not change that exclusion. Non-institutional financing and participations follow their own instruments, funding routes and consent rights. ## 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 controls explain the framework, but they do not certify current thresholds, definitions or delegated exception authority. Review [[wiki/evidence-and-limitations|Evidence and Limitations]] and current approved policy 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]] · [[wiki/syntheses/site-navigator|Site Navigator]]