Project Financing: Asset-Based Financial Engineering / Edition 1by John D. Finnerty
Project financing is an innovative and timely financing technique that has been used on many high-profile corporate projects, including Euro Disneyland and the Eurotunnel. Employing a carefully engineered financing mix, it has long been used to fund large-scale natural resource projects, from pipelines and refineries to electric-generating facilities and… See more details below
Project financing is an innovative and timely financing technique that has been used on many high-profile corporate projects, including Euro Disneyland and the Eurotunnel. Employing a carefully engineered financing mix, it has long been used to fund large-scale natural resource projects, from pipelines and refineries to electric-generating facilities and hydroelectric projects. Increasingly, project financing is emerging as the preferred alternative to conventional methods of financing infrastructure and other large-scale projects worldwide. The intricacies of project financing are formidable, and can easily be misunderstood and, consequently, misused. While project financing structures share certain common features, by necessity, they require tailoring the package to the particular circumstances of the project. That is where both the benefits and the challenges lie. As an investment banker currently with Houlihan Lokey Howard & Zukin, John D. Finnerty has a wealth of experience in project financing. Now, he brings his considerable expertise to a comprehensive exploration of the facts, figuresand potential faux passurrounding Project Financing. What distinguishes project financing from conventional direct financing is that rather than looking to the firm’s entire asset portfolio to generate cash flow, in project financing, the project is "a distinct legal entity" and the financing is tailored to the cash flow characteristics of the project assets. Such a structure can yield a more efficient allocation of risks and returns than conventional financing, but careful financial engineering is critical. With actual examples and case studies, Project Financing takes you through the process step by step. It covers the rationale for project financing, how to prepare the financial plan, assess the risks, design the financing mix, and raise the funds. Along with cogent analyses of why some project financing plans have succeeded while others have failed, you’ll find detailed information on:
- Designing contractual arrangements to support project financing
- Issues for the host governmentlegislative provisions, public/private infrastructure partnerships, public/private financing structures
- Credit requirements of lenders, and how to determine the project’s borrowing capacity
- How to prepare cash flow projections and use them to measure expected rates of return
- Tax and accounting considerations
- Detailed case studiesincluding Euro Disneyland and the Eurotunnel Projectthat illustrate how to apply the analytical techniques described in the book
Table of Contents
The Rationale for Project Financing.
Analysis of Project Viability.
Preparing the Financing Plan.
Discounted Cash Flow Analysis.
Financial Modeling and Project Evaluation.
Sources of Funds.
Issues for the Host Government.
Case Study: The Indiantown Cogeneration Project.
Case Study: The Tribasa Toll Road Project.
Case Study: The Euro Disneyland Project.
Case Study: The Eurotunnel Project.
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