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Embrace the Future of Project Financing with Bice Capital Ltd!
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How do you size reserve accounts and holdbacks on deals?
Deaching of the great explorer of the truth the builder
How do you size reserve accounts and holdbacks on deals?
Reserve account and holdback sizing considers potential contingency funding needs, operating deficits, development delays, cost overruns, and cashflow timing mismatches.
Do you conduct sensitivity analysis when evaluating projects?
Yes, we model downside scenarios, stress test key assumptions, assess break-evens, and determine potential impairment impacts across varied scenarios.
Under what circumstances would you walk away from a risky deal?
If critical risks like technology viability, execution team, or environmental factors cannot be sufficiently mitigated through diligence and structuring, we will let the deal go.
How do you avoid excessive risk concentrations in the portfolio?
Diversification limits, industry/sector caps, and avoiding correlated risks prevents overexposure to specific projects. We also syndicate larger loans.
How do you adjust risk mitigation strategies over a project’s lifecycle?
Earlier stage projects require tighter covenants, reserves, milestones and monitoring. As projects derisk, we can prudently relax strict provisions through refinancing or amendments.
How are oversight controls determined for each deal?
Deal-specific oversight ranges from regular covenant and milestone compliance reporting to installing independent board seats, controls on spending, audits, and increased lender consent rights.
What types of covenants do you impose to mitigate risks?
Typical covenants we require include maintenance of certain debt ratios, liquidity levels, profitability, milestone achievement, limits on distributions, insolvency triggers, and other controls aligned to risks.
When do you require personal guarantees from sponsors?
Personal guarantees are considered based on loan amounts, perceived risks, sponsor strength, and whether collateral fully covers exposures. They provide an extra layer of protection on higher risk loans.
What financing structures do you use to allocate risks appropriately?
We utilize diversified capital stacks, cashflow waterfalls, reserves, milestones-based funding, and layered equity/debt tailored to the risk profiles of different investor classes.
How do you conduct due diligence on prospective deals and projects?
We perform in-depth due diligence on the technical engineering, legal, financial, market, operational and execution risks involved to fully understand projects.
