Abstract: The capital structure of an SPV can be based on a large set of financing options. This chapter revises the available alternatives that sponsors and lenders can use to provide funds to the venture. Sponsors can inject funds in the form of pure equity or a mix of pure equity and subordinated loans. We explain why shareholders use this mix when facing a classic “dividend trap” issue. Banks provide syndicated loans customized to the specific borrower's needs. We illustrate the technical aspects of the syndication process, we discuss the roles banks play in the syndicate and the different alternative repayment methods that banks can propose to sponsors to better match the pattern of the unlevered free cash flows with the repayment schedule of the loan. In the chapter, we also analyze the alternative represented by project bonds launched on the debt capital markets and by project leasing contracts. We also provide information regarding the involvement of multilateral and bilateral institutions, together with Export Credit Agencies (ECAs) in project financings located in developing countries.
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 18
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