From Introduction to Project Finance: Essential Capital Markets


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.
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.
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.
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.
The sum of principal and interest is equal for each period.
Take advantage of discrepancies in price or yields in different markets.
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.
The physical project and its associated contracts, rights and interests of every kind, in the present or...

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Topics of Interest

Publications Project Finance International: biweekly magazine published by Thomson Financial. Infrastructure Journal: The on-line resource for infrastructure professionals. PFI Intelligence Bulletin...

13.2 DEBT SERVICE Debt service (i.e., loan interest payments and principal repayments) is one of the biggest factors in the financing structure that influences an investor's rate of return. The...

Glossary and Abbreviations Technical terms used in this book which are mainly peculiar to project finance are capitalised, and briefly explained in this Glossary, with cross-references to the places...

13.5 CONTROL OF CASH FLOW Just as during the construction period of the project the lenders only allow drawings to be made and costs to be paid when they are satisfied that these are for the...

The offering memorandum As a first step in the syndications sales cycle, the agent bank together with the project sponsors will prepare an offering memorandum (also known as an information...