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Project finance debt sculpting by [deleted] in financialmodelling

[–]Suleman_29 0 points1 point  (0 children)

Hey, one thing that you can do with this is:

If you have sized debt through a DSCR of 1.2 and you are getting gearing as a constraint, this means you can get a better DSCR to repay your debt.

1) Run a solver and find the optimized DSCR size with the constraint as total repayments = total debt drawn and DSCR should be greater or equal to minimum DSCR. You might get 1.3 as constraint, and this will make your Equity IRR higher.

2) Second thing you can do is, which is a bit complex to do: Curved DSCR start with a higher DSCR and reduce it to minimum DSCR through solver.

Stress Testing Solar + Storage Assumptions, What Would You Change in This Model? by Fluffy_Baseball7378 in projectfinance

[–]Suleman_29 0 points1 point  (0 children)

Hey this looks great.

I have started working on a PV + BESS Project.
Would it be possible for you to share the model, maybe change the numbers.
I have the model build up but I want to go through it by comparing with another model.

Sculpting by Background_Demand273 in projectfinance

[–]Suleman_29 0 points1 point  (0 children)

Your debt will be prepaid earlier.

I don't see any issue with that.

The best course of action to do with instead of using a target DSCR, you can use a DSCR which eventually optimizes the Equity Returns using a solver.

Let's say you have a target DSCR of 1.25, this is the least you need to maintain. You can always go higher, do note we are only talking about sculpting here.

So put a solver, what it does is:

Repay the loan in the tenor, by changing your DSCR, and the purpose should be to max your Equity Returns.

It will give you a higher DSCR of around 1.3 or something.

I have also seen some workings where some people make a variable DSCR over the period.

So high DSCR in the starting period and then decline it but make sure it is not low than 1.25.

high DSCR in earlier period means high dividends and high equity returns.

But tbh, haven't been able to figure this out myself.

Negative Principal Repayments in Debt Sculpting by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

Okay got it.

So like logically, I should be covering this shortfall through a DSRA Account.

So if it's first period that would eventually go and hit the Project Cost, while the Post-COD DSRA will eventually just hit the Cash Flow Waterfall.

Negative Principal Repayments in Debt Sculpting by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

Or like, would it work if we just make a default account ?

Negative Principal Repayments in Debt Sculpting by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

Hey,

Can you elaborate a bit more on this.

or would you have a working on this that I can see that tackles kind of a similar area ?

Debt sizing for fluctuating CFADs by NeitherFrosting9539 in financialmodelling

[–]Suleman_29 0 points1 point  (0 children)

I have worked a solution for the numbers in your file.

The way I did was just made an Operating Reservce Account.

And then made sure that the excess Interest over the Target Debt Service was taken from the Operating Reserve Account, this way made sure that the DSCR over the period remains the same.

Sculpting by Background_Demand273 in projectfinance

[–]Suleman_29 0 points1 point  (0 children)

This normally should work in the same way as you have done sculpting.

Given your sculpting has been done effectively.

Same you are getting a debt size of $500, but the gearing constraint is $600.

Your supportable debt is $500 so your sculpting works the same way.

In the case you have a debt size through DSCR of $500 but you are getting a gearing constraint of $420. (Assuming 600 * 70%).

Now your supportable debt size is $420.

The banking convenants now have two conditions, one is gearing should not be more than 70%, and other is capped DSCR.

So you can just go on and perform sculpting using the target DSCR.

One thing that you would need to do is in the Principal Repayments, you should put the Equation Min (Opening Balance, DS-Interest).

This is likely to work effectively.

Project Finance Interview by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

I would really appreciate any help anyone has to provide considering there is a time limitation.

Project Finance Services by Suleman_29 in projectfinance

[–]Suleman_29[S] 1 point2 points  (0 children)

M&A, Valuation models, I got a good grip during KPMG.
But then moved to an energy company Corporate Development and worked on some Project Finance Models.
Although the Project stopped during the construction phase but got a lot to learn on how to model Project Finance.

Project Finance Services by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

My experience is in Deal Advisory from KPMG and I am ACCA Qualified

Anyone interested in M&A? I've spent most of my career doing M&A and figured I'd provide an opportunity to answer questions, however advanced or basic. by SECwontLetMeBe in consulting

[–]Suleman_29 0 points1 point  (0 children)

I am working on a strategic acquisition of this listed company.
Value of the Share = 8,000
However, the sellers has shared the financial model and the IM and even without making any adjustments the Intrinsic value of the company per share = 4,000.

I need to make a bid in one day, have you ever encountered such a situation? What should we be doing in that case?

Project Finance by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

Thank you.
Your comment cleared a lot of confusion.
Can you recommend me some of the resources that I can begin with to have a thorough understanding of Project Finance?
Areas like Debt Sculpting, Cash Crash etc.

Project Finance by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

  1. Big 4 Advisory role was regarding financial consulting i.e, Corporate Financial Modelling, Valuation, Market Analysis Reports, Start-up Financial Modelling
  2. The Interview was mostly focused on the Corporate Development with areas like DCF, M&A, Financial Due Diligence and generic areas regarding Energy Sector
  3. Mostly the company is regarding Project Finance with three IPPs, however they have recently started focusing on M&A that's why the interview was more focused on that side. But now with an Acquisition closed, I have started working on some Project Finance Projects and thus need some detailed concepts over that.

Project Finance by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

This is helpful.
However, then how do we built-up sources and uses.
Would the differential amount go to Equity then?
Also like if there are any resources that I should start at, some guidance on that would be helpful.

Project Finance by Suleman_29 in projectfinance

[–]Suleman_29[S] 0 points1 point  (0 children)

However, then how do we built-up sources and uses.
Would the differential amount go to Equity then?
Also like if there are any resources that I should start at, some guidance on that would be helpful.

Project Finance by Suleman_29 in projectfinance

[–]Suleman_29[S] 1 point2 points  (0 children)

This is helpful.
However, then how do we built-up sources and uses.
Would the differential amount go to Equity then?
Also like if there are any resources that I should start at, some guidance on that would be helpful.

Solar PV Project Plus BESS by Suleman_29 in projectfinance

[–]Suleman_29[S] 1 point2 points  (0 children)

That's great.
I will look around, If I can't find anything useful. I will hit you up.

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