Glossary

Acceleration: After a default, the loan is fully due and payable. Repayments are accelerated to the present.
Account party: In a commercial letter of credit, the party instructing the bank to open a letter of credit and on whose behalf the bank agrees to make payment.
Accrued interest: Interest earned but not collected.
Acid test or quick ratio: Current assets, less inventories divided by current liabilities.
Ad valorem: Off the gross or stated value, usually a percentage.
ADB: Asian Development Bank.
Advance agent: A loan drawdown is advanced by the funder.
After tax cash flow: Total cash generated by the project annually, defined as profit after tax plus depreciation.
Agent: The bank charged with administering the project financing. Generic: a party appointed to act on behalf of a principal entity/ person.
All-in rate: Interest rate which includes margin, commitment fees, up-front fees.
Amortisation: The process of paying off an amount gradually by spreading the payments over several years.
Annual report: The company s annual accounts, audit statements and narrative account of the year at hand. Presentations vary considerably.
Annuity: The sum of principal and interest is equal for each period.
Arbitrage: Take advantage of discrepancies in price or yields in different markets.
Arranger: The senior tier of a syndication. This implies the entity that agreed and negotiated the project finance structure. Also refers to the bank/underwriter entitled to syndicate the loan/bond issue.
Asset: The physical project and its associated contracts, rights and interests of every kind, in the present or...

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Introduction to Project Finance: Essential Capital Markets

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