Book contents
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- CHAPTER TWENTY-ONE FINANCING SOURCES FOR THE PROJECT
- CHAPTER TWENTY-TWO THE OFFERING MEMORANDUM
- CHAPTER TWENTY-THREE PROJECT FINANCE DEBT COMMITMENT LETTERS
- CHAPTER TWENTY-FOUR CREDIT AND RELATED DOCUMENTATION FOR PROJECT FINANCE TRANSACTIONS
- CHAPTER TWENTY-FIVE EXPORT CREDITS DOCUMENTATION FOR PROJECT FINANCE TRANSACTIONS
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
CHAPTER TWENTY-THREE - PROJECT FINANCE DEBT COMMITMENT LETTERS
from PART SEVEN - DEBT AND EQUITY FINANCING
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- CHAPTER TWENTY-ONE FINANCING SOURCES FOR THE PROJECT
- CHAPTER TWENTY-TWO THE OFFERING MEMORANDUM
- CHAPTER TWENTY-THREE PROJECT FINANCE DEBT COMMITMENT LETTERS
- CHAPTER TWENTY-FOUR CREDIT AND RELATED DOCUMENTATION FOR PROJECT FINANCE TRANSACTIONS
- CHAPTER TWENTY-FIVE EXPORT CREDITS DOCUMENTATION FOR PROJECT FINANCE TRANSACTIONS
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
Summary
THE TERM SHEET
Most project finance credit transactions begin with the preparation of a term sheet. The term sheet sets forth, in outline form, the main deal to be negotiated between the lender and the borrower. A difference exists between a term sheet (sometimes called a letter of intent or interest letter) and a commitment letter. One area of project finance that is consistently misunderstood, by developers, credit officers, contractors, utilities, and other participants in a project financing, is the area of lender commitments, including the differences between a financing letter of intent and a formal commitment letter. This misunderstanding often leads to confusion over what a lender and project sponsor have agreed to, the terms of a financing, how much time the developer has to satisfy the conditions to closing, the relationship between the lender and the project sponsor on future deals, and similar concerns. This confusion is unfortunate because it surrounds the very beginning of a relationship between the lender and the project sponsor. The following discussion summarizes the loan process in a project financing, from loan application, through the letter of intent to the commitment letter.
Approaching the Project Finance Lender for Business Advice
Sometimes, the project sponsor approaches lenders about the appropriateness of an investment in a potential project or a project in operation. Questions include such concerns as whether a contract is financeable, whether a particular project is economic, and whether a contractor has a good reputation for performing contracts.
- Type
- Chapter
- Information
- The Law and Business of International Project FinanceA Resource for Governments, Sponsors, Lawyers, and Project Participants, pp. 310 - 317Publisher: Cambridge University PressPrint publication year: 2007