What happens if RFFI cannot pay back its loan?
To meet its conservation objectives while remaining in compliance with the financing package, RFFI must sell an easement, carbon credits and/or other ecosystem services at a value that reflects the difference between the property’s market value (industrial timber harvest, development and land appreciation) and the conservation value of the property based on its forest conservation and management approaches – the latter of which does not allow fragmentation and implements a property-wide forest restoration strategy. RFFI will be unable to meet its debt service obligations without the sale of a conservation easement. More specifically, RFFI will be in violation of certain loan covenants within 3 ½ years (end of 2011), which will allow Bank of America to foreclosure on the Property and find new ownership.
