Showing papers on "Collateral published in 2024"
01 Jan 2024
TL;DR: Project finance is the financing of a single, high capital intensive, long lasting industrial initiative as mentioned in this paper , where assets are given as collateral to creditors as the only source of income for debt service repayment.
Abstract: Project finance is the financing of a single, high capital intensive, long lasting industrial initiative. This initiative is incorporated in a specially created vehicle (the SPV) whose assets are given as collateral to creditors as the only source – together with the cash flow generated by the project – for debt service repayment. The chapter introduces the basic features of the deal and analyzes the rationale behind the use of project finance compared to traditional corporate finance. After the presentation of the main categories of sponsors, of the most important contracts used in the deal structuring and of the basic principles of risk management, the chapter includes a review of the theory of project finance and a summary of the existing academic literature.