Project Finance Modeling

Course

In London

£ 1,900 + VAT

Description

  • Type

    Course

  • Location

    London

  • Duration

    2 Days

Project Finance Modeling (T201) is a 2-day course that will teach you how to build a financial model to evaluate equity returns and secure non-recourse debt (or 'project' finance). Suitable for: Project Finance Modeling is aimed at those who need to build, modify and/or understand financial models associated with project finance transactions, usually infrastructure related and including new, 'green field' and PPP/PFI investments.

Facilities

Location

Start date

London
See map

Start date

On request

About this course

Attendees must be intimately familiar with the principles and specific techniques of FAST modeling which is applied throughout the Project Finance Modeling course. Preferably this knowledge should be obtained from reasonably recent attendance of the FAST Modeling Skills (T101) course followed by some practical on the job application. If you feel you may qualify without such a credential, you must contact us to see if this course pre-requisite can be waived.

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Course programme

Overview

Project Finance Modeling (T201) is a 2-day course that will teach you how to build a financial model to evaluate equity returns and secure non-recourse debt (or ‘project’ finance).

The course builds on the techniques and knowledge acquired in the pre-requisite course, FAST Modeling Skills (T101). Participants will be taught to apply general business and non-recourse finance theory to forecast cash flows associated with ‘green-field’ projects and special-purpose project companies. At the conclusion of the course attendees will have constructed a fully-functional financial model covering the period from the beginning of construction through to the end of the project’s operating period.

Target audience

Project Finance Modeling is aimed at those who need to build, modify and/or understand financial models associated with project finance transactions, usually infrastructure related and including new, ‘green field’ and PPP/PFI investments.

The course is aimed at associates with some modeling experience who have responsibility within their organization for developing or running a project finance model. Participants without prior knowledge of business theory, project finance, and basic model-building skills will struggle to keep up with the pace of this course. Attendance on FAST Modeling Skills (T101) is a prerequisite for Project Finance Modeling.

Teaching approach

Consistent with all Financial Mechanics T-series courses, Project Finance Modeling is a hands-on course with limited lecturing or speaking to PowerPoint slides. Attendees follow along with the instructor, building their own financial model on their own computers; in this way they immediately practice what they have been taught and can confirm their understanding of project finance principles and modeling techniques.

The course also applies FAST Modeling, namely producing models that are flexible, accurate, structured, and transparent, i.e. avoid complex formulas so they are simple to follow even if the subject-matter is complicated.

Agenda

Day 1 introduces attendees to the primary modeling requirements for a 'green field' investment or special-purpose project company. Participants will commence from the basic corporate business model completed in FAST modeling Skills (T101) and add calculations for construction-period capital costs and financing. This course will also more fully develop the cash flow waterfall (a.k.a. payments cascade) and basic period-by-period cover ratio calculations that form the heart of most structured finance transactions.

Topics covered on Day 1 include:

  • Construction financing: simple pro rata, single-tranche construction loan with residual equity funding, arrangement fees and LIBOR-based interest calculations, and impact of financing on accounting and tax depreciable bases.
  • Term financing: senior term loan further developed from T101, including primary period-by-period debt service cover ratios and 'sculpted' repayment profiles.
  • Model design: introduction to dual-time resolution modeling (monthly construction vs. semi-annual repayment/operations periods), transferring values between periods simply and efficiently.

Day 2 moves on to more advanced, yet common elements of project finance, including calculation of loan-life cover ratios, equity return calculations within dual-time period models, debt service reserve account deposit / release logic, and shareholder loans. Each of these components is built upon the well-designed, multi-sheet model structure developed by the participant during Day 1. Additional topics such as non pro-rata funding, construction-period escrow accounts and equity bridge loans are also discussed, though not actively modeled.

Requirements

Attendees must be intimately familiar with the principles and specific techniques of FAST modeling which is applied throughout the Project Finance Modeling course. Preferably this knowledge should be obtained from reasonably recent attendance of the FAST Modeling Skills (T101) course followed by some practical on the job application. If you feel you may qualify without such a credential, you must contact us to see if this course pre-requisite can be waived.

Attendees will need to bring a laptop with them, ideally one they are accustomed to using, with a Microsoft Windows operating system and MS Excel loaded. Laptops may be rented from Financial Mechanics for an additional charge.

Project Finance Modeling

£ 1,900 + VAT