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Description of Advanced Project Financing

This book is an indispensable guide to the risks encountered in a project financing. Written by Richard Tinsley, author of the best-selling self-study guide Project Finance, the book begins by identifying the key risks in project finance. From this, the reader is presented with 214 real-world case studies in which each choice of risk structure is explained and assessed. Starting with a cashflow analysis, the book looks at the best structures and funding techniques to mitigate and avoid risk. Deal diagrams are used to illustrate the many alternative project finance structures that can be considered. Furthermore, allied financial measures are explained and demystified. This book is an invaluable guide for the project finance practitioner, enabling them to dissect any project finance and find the appropriate risk structuring. Interest areas: project finance, currency risk, credit risk, counterparty, joint venture documentation, emerging markets.

Title Information

ISBN:

9781855648340

Pages:

294 pages

Format:

Paperback

Product Code:

12863

Publisher:

Euromoney Institutional Investor

Published:

01/09/2000

Edition:

1st Edition

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Contents of Advanced Project Financing

Preface
Author biography
List of case studies
List of exhibits
Introduction
Project finance's
Project finance defined
Project finance structuring
Advantages
Disadvantages
Summary

1: Structuring stages
Technical feasibility stage
Financial feasibility stage
Market feasibility stage
Use in mergers and acquisitions
Project concept
Summary

2: Funding sources
Local currency funding
Capital markets
Developers
Mezzanine
Merchant financing
Islamic lending
Governments-public-private partnerships
Leasing
Commodity-based lending
Equity
Summary

3: Cashflows
Modelling aspects
Cashflow controls
Modelling cashflows
Summary

4: Financial advisers
Advantages and disadvantages
Need for an adviser
Advisory costs
Who are the financial advisers?
Summary

5: Credit ratios
Debt service cover ratio
Residual
Interest cover ratio
Principal cover ratio
Present value ratios
Loan life ratio (LLR)
Project life ratio (PLR)
Residual life ratio (RLR)
Debt:Equity ratio (D:E)
Payback
Discount rate
Leveraged IRR
Choice of discount rate
Multi-tranche ratios
Accounting ratios
Summary

6: Risk systems
Insurance
Statistical
Risk modellers
Checklist
Contractual/Jigsaw
Project finance

7: Sector profiles
Sector features
Analysis by sector
Summary

8: Structures
Risk
Risk division
Document matrix
Interest
Principal
Drawdown styles
SPV
Mezzanine
Subordinated debt
Working capital
Bridge loans
Multi-tranche
Commodity funding
Contract structures
Trigger structures
Financed structures
Study structure
Avoided
Summary

9: Due diligence
Systematic review
The feasibility process
Selection of experts/engineers
Customary reviews
Telecoms subscriber studies
Common sense

10: Supply risk
Contract structures
Trigger structures
Financed structures
Study structures
Structures
Summary

11: Market risk
Market-price
Contract structures
Trigger situations
Study techniques
Summary

12: Foreign exchange risk
What percentage to structure?
Contract structures
Parallel loans
Barter
Trigger structures
Avoided
Study
Summary

13: Operating risk - technical component
Contract structures
Trigger structures
Financed structure
Study structures
Summary

14: Operating risk - cost component
Contract structures
Trigger structures
Financed structures
Study structure
Avoided
Summary


15: Operating risk - management component
Contract structures
Trigger structures
Study
Summary

16: Environmental risk
Contract structures
Trigger structures
Financed structures
Study
Avoided
Summary

17: Infrastructure risk
Contract structures
Studies
Summary

18: Force majeure risk
Acts of nature
Acts of man(kind)
Acts of government
Impersonal acts
Trigger structures
Studies
Summary

19: Completion risk
Completion test
Contract structures
Trigger structures
Financed structures
Study approach
Sector completion protocols
Summary

20: Engineering risk
Design/calculations
Study

21: Political risk
Definitions
Government supports
Treaty protection
Contract structures
Trigger structures
Financed structures
Study sources
Avoided

22: Participant risk
Sponsor pre-completion
SPV
Trigger structures
Study route
Avoided
Summary

23: Interest rate risk
Contract structures
Trigger structures
Summary

24: Syndication risk
Roles
Choice of banks and placements parties
Pricing
Disclosure
Contract structures
Study structures

25: Legal risk
Legal regime
Concept of law
Enforcement
The courts
Solicitors/lawyers
Contracted structures
Trigger structures
Study structures
Avoided
Summary


Appendix 1: Differing definitions
M&A
Securitisation
Lawyers
Project financiers

Appendix 2: Typical owner controlled insurance programme (OCIP)

Section 1. Owner's project company insurance coverages - construction phase
Section 2. Contractor's insurance requirements - construction phase
Section 3. Owner's project company insurance coverages - operational phase

Glossary