7:00 debt size = PV, present value of debt service 8:45 interest rate determines the debt size for the project. the lower the risk, the lower the DSCR interest rate. and higher the debt size. tenor also determines the debt size. the longer the tenor, the higher the debt size is.
Instead of considering 100 as opening balance for all years, each year's closing Balance should be calculated by deducting interest of each year calculated on respective year's opening balance.. this would be more prudent..
I have a doubt , please solve this. I understand the circularity of debt sizing, but for CFADS, we start with revenues for which we require tariff charges for a 4 part tariff structure (suppose). Now for the capital cost recovery charge rate we need to goal seek the rate such that the equity IRR meets the target IRR. So essentially we need CFADS for arriving at the capital recovery charge rate which in turn is again determing the CFADS and hence the circularity. Also this CFADS is being used in the debt sizing equation. So which to size first debt or tariff?
thank you for this video. very well explained, however I couldn't follow how risk is factored in while we can see how increase/ decrease in interest rate, DSCR and tenure effect the debt size. why is risk directly proportionate to interest rate, DSCR and tenure?
Hi, Risk would manifest itself in decrease of loan tenor, increase of DSCR or interest rates - therefore risk would decrease the loan size that the project can raise.
Hi Nataliya, we are not planning to release telecom, but we will do a project finance mining course. In this course, we should how to model the debt based on multiple covenants, which are suitable for projects with inherent revenue risk such as a renewable or telecom, it is a different approach we have taken in the previous course.
@@financialmodeling1899 Modeling mining projects are super interesting, if you go up the value chain, not just stop at extraction. But I wonder how big a demand for those projects right now, given the current climate issues.
7:00
debt size = PV, present value of debt service
8:45
interest rate determines the debt size for the project.
the lower the risk, the lower the DSCR interest rate. and higher the debt size.
tenor also determines the debt size.
the longer the tenor, the higher the debt size is.
thank you for this video, very interesting and contain everything I want to know
Awesome!
Thank you, very useful!
Thanks for watching!
Thank you
You're welcome
Instead of considering 100 as opening balance for all years, each year's closing Balance should be calculated by deducting interest of each year calculated on respective year's opening balance.. this would be more prudent..
I have a doubt , please solve this. I understand the circularity of debt sizing, but for CFADS, we start with revenues for which we require tariff charges for a 4 part tariff structure (suppose). Now for the capital cost recovery charge rate we need to goal seek the rate such that the equity IRR meets the target IRR. So essentially we need CFADS for arriving at the capital recovery charge rate which in turn is again determing the CFADS and hence the circularity. Also this CFADS is being used in the debt sizing equation. So which to size first debt or tariff?
thank you for this video. very well explained, however I couldn't follow how risk is factored in while we can see how increase/ decrease in interest rate, DSCR and tenure effect the debt size.
why is risk directly proportionate to interest rate, DSCR and tenure?
Hi, Risk would manifest itself in decrease of loan tenor, increase of DSCR or interest rates - therefore risk would decrease the loan size that the project can raise.
Hi, just wondering when is the renewable energy project financial modeling out ?
very soon, we are finalizing it, thanks!
I would be interested in the Telecom infra project financial modeling, any plans to do smth like that?
Hi Nataliya, we are not planning to release telecom, but we will do a project finance mining course.
In this course, we should how to model the debt based on multiple covenants, which are suitable for projects with inherent revenue risk such as a renewable or telecom, it is a different approach we have taken in the previous course.
@@financialmodeling1899 Modeling mining projects are super interesting, if you go up the value chain, not just stop at extraction. But I wonder how big a demand for those projects right now, given the current climate issues.