Preface to the Second Edition
Preface to the First Edition
Scannapiecos Foreword
Foreword
About the Author and the Contributors
Chapter 1. Introduction to the Theory and Practice of Project Finance
Introduction
1.1 What is Project Finance?
1.2 Why Do Sponsors Use Project Finance?
1.3 Who Are the Sponsors of a Project Finance Deal?
1.4 Overview of the Features of Project Finance
1.5 The Theory of Project Finance
Chapter 2. The Market for Project Finance: Applications and Sectors
Introduction
2.1 Historical Evolution of Project Finance and Market Segments
2.2 The Global Project Finance Market
2.3 The Evolution of the PPP Market
Chapter 3. Project Characteristics, Risk Analysis, and Risk Management
Introduction
3.1 Identifying Project Risks
3.2 Risk Allocation with Contracts Stipulated by the SPV
3.3 Summary of the Risk Management Process
Chapter 4. The Role of Advisors in a Project Finance Deal
Introduction
4.1 The Role of Legal Advisors in Project Finance Deals
4.2 The Role of the Independent Engineer in Project Finance Deals
4.3 The Role of Insurance Advisors and Insurance Companies in Project Finance Deals
Chapter 5. Valuing the Project and Project Cash Flow Analysis
Introduction
5.1 Analysis of Operating Cash Flows and Their Behavior in Different Project Life Cycle Phases
5.2 Defining the Optimal Capital Structure for the Deal
5.3 Cover Ratios
5.4 Sensitivity Analysis and Scenario Analysis
Chapter 6. Financing the Deal
Introduction
6.1 Advisory and Arranging Activities for Project Finance Funding
6.2 Other Roles in Syndicated Loans
6.3 Fee Structure
6.4 International Financial Institutions and Multilateral Banks
6.5 Bilateral Agencies: Developmental Agencies and Export Credit Agencies (ECAs)
6.6 Other Financial Intermediaries Involved in Project Finance
6.7 Funding Options: Equity
6.8 Funding Options: Mezzanine Financing and Subordinated Debt
6.9 Funding Options: Senior Debt
6.10 Project Leasing
6.11 Project Bonds
Chapter 7. Legal Aspects of Project Finance
Introduction
7.1 The Project Company
7.2 The Contract Structure
7.3 Refinancing Project Finance Deals
Chapter 8. Credit Risk in Project Finance Transactions
Introduction
8.1 The Basel Committee’s Position on Structured Finance Transactions (Specialized Lending)
8.2 Rating Criteria for Specialized Lending and Their Application to Project Finance
8.3 Rating Grade Slotting Criteria of the Basel Committee and Rating Agency Practices
8.4 The Basel Accord and the Treatment of Credit Risk for Project Finance Loans: Is Project Finance More Risky Than Corporate Loans?
8.5 Empirical Studies on Project Finance Defaults and Recovery Rates
8.6 Introduction to the Concepts of Expected Loss, Unexpected Loss, and Value at Risk
8.7 Defining Default for Project Finance Deals
8.8 Modeling the Project Cash Flows
8.9 Estimating Value at Risk through Simulations
8.10 Defining Project Value in the Event of Default
CASE STUDY 1: Cogeneration 1
CASE STUDY 2: Italy Water System
CASE STUDY 3: Quezon Power Ltd. Co.
CASE STUDY 4: Milan Metro Line 5
APPENDIX: The Structure and Functioning of the Simulation Model
Introduction
A1 Breakdown of the Financial Model
Glossary and Abbreviations
References
Index
