What is a tail in project finance?

What is a tail in project finance?

The tail period refers to the time duration during which an investment banker working on the company’s transaction is entitled to receive compensation after the deal closes, even after the termination of his services.

What projects suitable for project finance?

Types of projects Project financing in India is used for both greenfield and brownfield projects in sectors such as: Public infrastructure (roads, airports, metro rail and ports, among others). Energy (power generation (solar, thermal, wind, hydro), power transmission and so on). Construction.

What is Cfads formula?

Conceptually similar to unlevered free cash flows, CFADS is calculated as follows: Cash Flow Available for Debt Service (CFADS) = Revenue – Expenses +/- Net Working Capital Adjustments – Capital Expenditures – Cash Tax – Other Items.

How do you get Cfads?

The following show two common ways to calculate CFADS:

1. Starting with EBITDA. Adjust for changes in net working capital. Subtract spending on capital expenditures. Adjust for equity and debt funding.
2. Starting with Receipts from Customers. Subtract payments to suppliers and employees. Subtract royalties.

What is a tail in debt?

A tail period is the time period during which an investment banker working on a company’s sale is entitled to payment, even after termination of services, if the deal closes within the period.

What is tail clause?

One of the most significant and ofte-negotiated terms of the listing agreement is what’s known as the “tail period.” The tail period is a standard clause in a listing agreement that provides for registration by the broker of certain parties or transactions and a period of time during which, if a lease or contract of …

Is commercial paper a capital market instrument?

Commercial paper, also called CP, is a short-term debt instrument issued by companies to raise funds generally for a time period up to one year. It is an unsecured money market instrument issued in the form of a promissory note and was introduced in India for the first time in 1990.

What are the two phases of project financing?

Project Financing – Financial Scheme for Long-Term Projects. The process of development of a project consists of 3 stages: pre-bid stage. contract negotiation stage.

Is project finance part of investment banking?

Project finance is one of the most popular but least understood groups in investment banking. Sometimes PF is a standalone product group and sometimes PF is under the corporate banking umbrella (as there is a large lending component).

What is the difference between Ebitda and Cfads?

CFADS is preferred over EBITDA in determining gearing and lending capacity because this measure does not take taxes and timing of cash flows into consideration. EBITDA is a common metric in corporate finance but in project finance the focus is on actual cash flow.

How do I convert Ebitda to Cfads?

Measuring CFADS CFADS is quite simple to calculate and is defined as: EBITDA +/- changes in working capital +/- corporation tax +/- capex +/- dividends You should compare this to your debt service obligations (i.e. your business’ bank and asset finance repayments, including interest).

What to expect in a project finance course?

SGT: 15.30 – 22:30pm The goal of this course is to equip participants with an overview of Project Finance by taking them through all stages of a Project Finance transaction, so that they can apply the techniques of Project Finance. Apply a structured and systematic approach to financing projects using some of the techniques of Project Finance

Who should do this online project finance training?

Project finance professionals (Head of Project Finance, Manager of Project Finance, etc.) should do this online project finance training. Even corporate finance and structured finance professionals can learn this course if they want to increase the depth and breadth of their knowledge.

What is the tail period for a bank?

The tail period is the time difference between the end of planned debt amortization and the end of the operating period. For a bank, the longer the tail period the better. If the project cash flow is not enough to support the amortization in time, the bank has 10 years of tail period to have the debt amortized. Home Study Guides

How do you prepare a project finance plan?

Apply a structured and systematic approach to financing projects using some of the techniques of Project Finance Recognize the key characteristics of a robust project and identify the weakest links in the transaction Use qualitative and quantitative tools and measures to distinguish the key risks