Please complete this Initial Project Finance Assessment form with comprehensive details. Prior to filling out the form, review the Guidance Notes on How to Complete the Form & Project Eligibility Criteria below the form. The notes are designed to help you provide all project and collateral information required by the Lenders. This is important as the Lenders will determine if the project is eligible for financing based on your form submission.
How to Complete the Form & Project Eligibility Criteria
Before Completing The Form: Before starting your application, carefully read these Guidance Notes together with Our Process and Finance Products range to ensure a thorough understanding of the Initial Project Assessment process.
Completing the Form: To initiate your finance inquiry, please fill out our Initial Project Assessment Form with detailed information about your capital request:
- Begin by selecting the appropriate inquiry type—Project Finance, Private Trading, or Gold transaction—to direct your application to the right department.
- Fill out the form with precise, detailed information about your project, answering all questions.
- Collateral Information: Clearly outline the collateral you can provide, as detailed in these Guidance Notes.
- Attach key supporting documents, such as a Project Executive Summary or Feasibility Study, to provide an overview of your project and its financial aspects.
- Do not combine multiple projects. Each project must be submitted on a separate application form.
Initial Project Assessment: The completeness and quality of your responses are vital for our assessment. Incomplete submissions will not be processed, as the information requested is crucial for lenders to evaluate your project’s eligibility for funding.
Response to Submission: If your project meets the funding criteria, we will contact you with the next steps. If it does not, you will be notified that the project has been declined.
What is Project Finance?
Project finance involves funding public services, industrial projects, and long-term infrastructure through a non-recourse or limited recourse financial structure. This method typically combines equity and debt, with repayment coming from the project’s generated cash flow.
A key advantage of project financing is its off-balance-sheet nature, ensuring no impact on the credit of shareholders or government contracting authorities. It also transfers risk to the lenders, who may receive higher margins as a result.
Project finance is also commonly applied in sectors like mining, oil and gas, construction, and building projects. Ordinarily, the finance is composed of debt. The capital stack determines the hierarchy of different financing sources. Senior and subordinated debts are classified according to their position in a business’ capital stack.
What is Collateral?
Collateral is an asset that serves as security for project finance loans provided by the lenders. Collateral is an item of value that is utilized to secure the project financing, which is essentially the loan.
Each project may have different forms of collateral, and the lenders may utilize various collateral forms to fund the entire project and provide 100% of the project funding (namely, the whole capital stack).
The purpose of collateral is to protect the lender, and it serves as a form of security in case of default by the project or borrower. In the event of default, the lender can seize the collateral to recover its losses. Collateral adds validation to the project and increases the chances of its success while minimizing the lender’s risk.
How Collateral Works:
Before providing finance, the lenders need to ensure that the project can repay the loan and safeguard the lender’s interests. Collateral is required as a form of security to protect the lender’s funding.
In situations where there are no initial assets, such as during the construction phase of a project, temporary collateral may be utilized to ensure that the borrower meets its financial obligations until the project is completed. This guarantees that the project will be able to repay the loan and protects the lender’s investment.
Collateral can come in various forms depending on the nature of the project finance loan. A commercial property mortgage, for instance, may require collateral in the form of the property itself. In some cases, institutional credit may be used as security, provided by a credit-worthy co-signer or borrower with a credit rating from Moody’s, S&P, or Fitch. For project finance loans, collateral typically includes the pledge of interest in the credit-worthy borrowing group, as well as all the assets associated with the project.
Project Finance Eligibility Criteria:
Premium Projects in prime locations that seek a minimum of $200,000,000 (200 million US Dollars) in Private Debt Project Finance, and have Collateral worth at least 20% of the CAPEX. Collateral must be liquid and have current market value.
Acceptable Collaterals:
This is required for All Projects:
All projects must meet certain requirements to be considered prime investment grade. These requirements include having bankable investment-grade collateral and receiving a rating of AAA or AA from Moody’s, Standard & Poor’s (S&P), or Fitch.
Additionally, the projects should have long-term offtake and feedstock agreements with established companies that have investment-grade status or are considered blue-chip companies.
The countries where the projects are located should also have investment-grade status and pose low risks for anti-money laundering (AML).
The non-bank lender (e.g. institutional funds, family offices) may consider various forms of collateral such as SBLCs, BGs, corporate guarantees, as well as government bonds, municipal bonds, sovereign bonds, and treasury bonds.
Hard assets may not be used as the primary collateral (as it is difficult to foreclose or repossess hard assets, e.g. real estate or personal assets, in jurisdictions outside of the U.S). They can be used however to enhance credit.
All projects must have collateral to pass the Initial Project Assessment.
Please note that the acceptance of your collateral is at the discretion of the Lenders.
Acceptable Forms of Collaterals for Private Debt Loans:
Cash, Bridge Loans, Bank Guarantees (major banks only), Commercial Real Estate (CRE), Corporate Guarantees, Credit Enhancements, Debt Instruments (e.g., corporate bonds, US treasuries, municipal bonds, etc.), Future Contracts, Insurance Guarantees, Investment Portfolio (traded securities, bonds, commodities, cash, etc.), Letters of Credit (investment grade), Offtake Agreements, Sovereign Guarantees, Bitcoin.
Note: Paper instruments, such as bonds, submitted as collateral must be actively TRADING instruments in recognized markets to ensure their liquidity and current market value.
Acceptable Collateral Forms for Trading:
For Private Placement Trades, in addition to the collateral forms for private debt loans, the Trade Desks accept a broader range of assets including gold, commodities such as copper, palladium, sugar, and precious stones like diamonds.
Hard assets without liens are also considered, providing more options for leveraging physical assets.
These additional forms of collateral allow for greater flexibility and are evaluated individually to align with Trading Desks’ risk management and investment criteria.
Please note that the acceptance of your collateral is at the discretion of the Trading Desk.
We Do NOT Provide:
Securities transactions, capital raising, hedge fund transactions, wealth management, securities trading, venture capital (VC), capital risk investment, commodities trading, financing of distressed assets or operations, nor are we broker-dealers as defined by SEC regulations.
Project Assessments and Financing:
Only premium projects make it through to the term sheet. They are usually located in prime locations in the US, Canada, and the UK, have long-term purchase/sale agreements, such as PPA, SPPA, or other types of offtake agreements, with investment-grade ratings, have a value of $200 million or more, and income-producing real estate properties in the US, such as resorts and hotels with established operating agreements with international hotel chains.
Lenders obtain funds for their financing model from investment banks through the placement of structured notes or from lenders’ own sources. The notes must have an investment grade, which is determined by the underlying assets such as projects and their investment grade collaterals. Lenders can provide full financing for such projects “premium projects” with premium investment grade.
Disclaimer:
AltFin, Lenders and their Advisors are not a United States Securities Dealer, wealth manager, advisor, banker, securities trader or registered broker-dealer and follow under the SEC Reg D Exempt Criteria. This form and its contents, verbal and written communications should never be considered a solicitation for any purpose in any form or of its content here within. The information provided in this email communication and its attachments are not a solicitation or a securities offering under SEC Regulation. This website and its content including this form is for informational purposes only.