# Presentation: 269692

## Structured and Project Financeat Ex-Im Bank

**A Quick Introduction**

## What You Will Learn Here

- What cases does the Structured Finance Division handle?
- What is the difference between “project” and “structured” finance?
- What are the basic principles of a limited recourse structure?
- How long will my PF transaction take to process?
- Who at Ex-Im gets involved in PF transactions?

## The Structured Finance Division

- The SFD handles transactions that are:
- corporate credits (no bank or sovereign guarantee) for over $10 million
- “structured”
- limited recourse project financings

## Structured & Project Finance:  What is the Difference?

- _Structured (Typical)_
- Existing company borrower financing  an expansion
- Full recourse to borrower
- Analyze historical & projected cash flows
- Limited “perfection of security”
- Can finance 85% of project costs (subject to U.S. content rules).

- _Project Finance_
- SPV borrower financing a greenfield project or expansion
- Limited recourse to parent companies
- Analyze project’s future cash flows
**Complex documentation to perfect security**
**More than 15% equity required, so total debt provided less than 85%**

## Terms (OECD guided)

- _Structured Finance_
- Pay interest during construction (IDC)
- Maximum repayment term usually 10 years
- Flexible amortization in some cases limited by WAL of 5 to 6.25 years
- Finance for: local costs connected to export contract, ancillary fees

- _Project Finance_
- Capitalize IDC
- Maximum repayment term usually 14 years
- Flexible amortization limited by WAL of 7.25 years
- Finance for any local costs up to 15% of U.S. contract value and ancillary fees

##       PF Project Structure 

**Input**
**Contracts**
**Guaranteed supply of inputs to project**

**SPV**
**Made up of project sponsors that provide  equity.  SPV is the borrower. **

**Off Taker**
**Provides revenue stream to project.  Must be creditworthy.**

**EPC**
**Likely source of U.S. content.  Must show technical experience.**

**O&M**
**Contract with capable firm extends beyond repayment term.**

**Host Government**
**Legal /regulatory framework & evident support**

## Top Questions to Ask Yourself

- What is being exported from the U.S.?
- Is the transaction CLS compliant? (based on the borrower for structured transactions and the offtaker for limited recourse deals)
- What structure are you proposing?
- If yours is a limited recourse transaction:
- Who are the sponsors?
- How much equity is provided?
- Is the offtaker creditworthy?
- Who is your financial advisor?

##     PROJECT FINANCE  PROCESS:  Phase I

**letter of interest**

**complete application  received**

**advisor  & counsel   retained**

**project       finance            consultation**

**PPL issued or          project     rejected****             **

**7-14 days**

**45 days**

**internal   review   complete**

**5 days**

##    PROJECT FINANCE PROCESS:  Phase II

**PPL  issued****       **

**35 days**

**Sponsor/Ex-Im negotiation  of  key financial terms  **

**internal    board       action**

**  ****Congressional  **
**   ****review complete final Board approval**

**time for issue resolution**

**document    execution**

**disbursement**

**financing negotiations**

**conditions  precedent**

## The Ex-Im Bank Team

- International and Domestic Business Development
- Structured Finance Division
- Other parts of the Bank
- General Counsel
- Engineering and Environment
- Country Risk Analysis
- Board of Directors
- Credit Review and Compliance
- Asset Monitoring