Project Finance
Project Finance is a long-term structured financing for infrastructure projects based on project future cash flow.
Project Finance is a credit operation that usually meets, cumulatively, the following conditions:
• Constitution of a Special Purpose Entity (SPE) for implementation of the project to be financed, with the purpose of separating the cash flows, shareholders' equity and all of project risks;
• Project future cash flows should be sufficient to support financing expenses and administrative and operational costs;
• Project future revenues should be bound or assigned in favor of the financiers;
• Debt Service Cover Ratio (DSCR) forecasted for each year of the project operating phase should be sufficient to cover the financing expenses, considering some assumptions negotiated between the customer and the financiers;
• Establishment of a minimum amount for shareholders' capital contribution; and
• Structure of wide-ranging and sophisticated insurance, warranties and covenants.
UPSIDE has an extensive track record of services in Project Finance, structuring operations using national and international resources. In Brazilian market, we conduct transactions with Development Banks (BNDES, BNB), Constitutional Funds (FCO, FNE, FNO, FDA), and the main private banks, beyond operations through capital market. Internationally, we operate with the main Export Credit Agencies (ECAs) and the China Development Bank (CDB).
As advisor, we undertake our best efforts to offer favorable conditions of negotiation to our customers, providing consistent economic and financial forecasts, evaluation and risk mitigation, adequate amortization terms and grace periods, feasible covenants, higher leverage levels, competitive cost and speed in the fundraising process.
Our involvement in the transaction does not end with the disbursement of funds. We also operate in the management of the facility agreement during its whole period, monitoring the entire process of requests for disbursements and verification of use of funds with the financiers and assisting the customer in controlling the compliance of contractual covenants.