There are infinite structures to the interest calculations and this element of indebtedness has its own repayment profile within the loan note. Interest could be:

• calculated monthly, quarterly, six monthly or annually;
• paid monthly, quarterly, six monthly, annually or all accrued till the end of the loan note period;
• compounded with agreed interest accumulating on accrued interest;
• non-compounded
• Zero coupon.

Example 1

£10,000,000 principle deferred debt repaid in two equal instalments of £5,000,000 at the end of the first and second anniversary with interest accrued over the two year period and paid at the end of the loan note period.

Example 2

£10,000,000 principle deferred debt repaid in five equal instalments of £2,000,000 at the end of each anniversary for five years with interest paid at the end of each anniversary.

Example 3

£10,000,000 with no repayments for the first three years and then followed by two bullet repayments of £5,000,000 at then end of year four and year five with no interest liability.