Advanced Project Finance –

Structuring the Risks

1st Edition

C. Richard Tinsley

Preface

Introduction  (careful - large file to open!)

1.     First BOT contract

2.     Project Finance participants

3.     Deer Park

4.     Barking

5.     Train Finance 1

Ch 1 Structuring Stages

1.1            Croydon Tramlink stages

1.2       Hubco

1.3       Aguas Argentinas

1.4       Aguas Argentinas tranches

1.5            Project-Finance stages

1.6            Project-Finance approval process

1.7       Help for the approval process

1.8            Moody’s ratings timetable

1.9       Burnie Hospital

 Ch 2 Funding Sources

2.1              ECA Project-Finance “Consensus”

2.2              Hubco Partial-Risk guarantee

2.3              Project Finance total rated volume

2.4              Corporate bond issuers, 1920-2000

2.5       Bond ratings comparison

2.6            Infrastructure funds

2.7       Islamic lending facilities

2.8       Direct lease

 Ch 3 Cashflows

3.1              Four benchmark cashflow cases

3.2              KPMG survey

3.3              8 Principal repayment methods

3.4              Repayment profile

3.5              Tribasa cash sweep

3.6              Cash-trap styles

3.7              Reserve styles

3.8              Debt Service reserve

3.9              Maintenance reserve

3.10          Capex reserve

3.11          Basic International waterfall of accounts

3.12          Funds flow through lockbox

3.13          Flow of funds without lockbox

3.14          Model design

3.15          Typical sensitivities

3.16          Bases for liquidated damages

3.17          Input sheet

3.18          Common shortcomings

 Ch 4 Financial Advisers

Ch 5 Credit Ratios

5.1              Sector cashflow profiles

5.2              DSCR

5.3              Summary Cashflow Report

5.4              Key ratio targets

5.5              Base Case cashflow

5.6              Downside case #1

5.7              Downside case #2

5.8              PV (“Life”) ratios

5.9              Criticisms of PV ratios

5.10          Payback calculation bases

5.11          Other discount rates

5.12          Multi-tranche

5.13          Telecoms ratios

 Ch 6 Risk Systems

6.1            Cashflow risk matrix

6.2       Risk insurances for power plant construction and operation

6.3       Key risks facing the company

6.4       Risk mapping - insurance industry

6.5            Lenders’ rights in insurances

6.6       Project Finance’s 16-risks system

 Ch 7 Sector Profiles

7.1       Project Finance sectors -- banks

7.2       Project Finance sectors -- bonds

7.3              Good Project-Finance sectors

7.4              Difficult Project-Finance sectors

7.5              Rayong

7.6              Construction financing structure

7.7              Term financing Structure

7.8              Merchant power structures

7.9              Croydon Tramlink

7.10          Centragas

7.11          Centragas – 16 risks profile

7.12          SmarTone

 Ch 8 Structures

8.1       Risk trade-off – documentation

8.2              Reasons for project SPV structure

8.3              Partnership security structure

8.4              Train F

8.5              M2

8.6              Iduapriem cofinancing/mezzanine

8.7              Misima gold warrants

8.8              Supplier credit

8.9              Buyer credit

8.10          Pipeline/gas processing plant

8.11          Swedish leveraged lease

8.12          Cross-border lease & defeasance

8.13          Export financed lease

8.14          Wrap lease

8.15          Captive lessor

8.16          Platform hire with shipyard finance

8.17          Croydon leases

8.18          Termobarranquilla structure

8.19          Termobarranquilla leasing

8.20          Termobarranquilla lease terms

8.21          Joint financing

8.22          Moody’s ratings analysis pyramid

8.23          10-Year corporate bond default rates -- 1970-1994

8.24          Hero Asia

8.25          Barking

8.26          Diamond structure

8.27          Letters of comfort

 Ch 9 Due Diligence

9.1            Feasibility study types

9.2       Traffic study techniques

9.3            Forecasting tollroad traffic

9.4       Traffic and revenue forecasting approach

9.5       Power due-diligence review

9.6            Kvaerner report -- Murrin Murrin

 10.1          Navotas

10.2          Telecoms Jipp curve

10.3     2005 S. Africa export steam-coal cost curve

 Ch 11 Market Risk

11.1     Market Risk -- quantities

11.2     Market Risk -- prices

11.3     Ekofisk

11.4            Production payment

11.5            Monetisation - IAF client

11.6     Ras Laffan

11.7     Celeron

 Ch 12 Foreign Exchange Risk

Ch 13 Operating: Technical Risk

13.1     Murrin Murrin

13.2     Sithe Independence

13.3            Commercialising steel technology

 Ch 14 Operating: Cost Risk

14.1     World onshore oil cost curve

Ch 15 Operating: Management Risk

Ch 16 Environmental Risk

16.1     Ranger environmental rehabilitation

 Ch 17 Infrastructure Risk

Ch 18 Force majeure Risk

18.1     Core insurances

 Ch 19 Completion Risk

19.1     Various Completion-Test formats

19.2     Kutubu Completion Test

19.3     Subic

19.4     BOO DRI/steel project

19.5     DIS insurances

19.6            Petropower

19.7     Levels of LDs--a crude tool

19.8            Bonding/guarantees in construction contract

19.9     Don Muang Tollway

19.10            Petrozuata

19.11   STAR -- Sistem Transit Aliran Ringan

19.12   Equity and debt subscription

 Ch 20 Engineering Risk

Ch 21 Political Risk

21.1     Porgera

21.2     Kutubu

21.3            Tolukuma

21.4            Government guarantees

21.5            PNGOR

21.6     World Bank Group structures

21.7     Ok Tedi

21.8     World Bank partial risk

21.9     OPIC-insured note

21.10            Bougainville

21.11   MIGA insurances

21.12   Los Pelambres -- debt:equity swap

21.13   Prince Chart -- Saddam Hussein

21.14            Institutional Investor’s 1999 country credit ratings (Have you got the latest for this from E or II?)

 Ch 22 Participant Risk

22.1            Project-Finance participants

22.2          Participant-Risk matrix

22.3          SPVs

22.4          Bankruptcy remoteness

 Ch 23 Interest Rate Risk

Ch 24 Syndication Risk

24.1          Syndication types

24.2          Typical syndication timings

24.3          Information memorandum

 Ch 25 Legal Risk

25.1          TelecomAsia

 Appendix 1:  PF Definitions

Appendix 2

4          Legal definition of Project-Finance borrowing

Appendix 2:  Delay-in-Startup Insurances (M.Good, PriskA)

Glossary

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