What is a Holdco loan?

Holdco loans allow project sponsors to reduce the cost of capital by replacing some expensive equity in the project with cheaper debt. Most holdco loans are entered into after construction of the project is completed.

What is back leverage in project finance?

Also referred to as a holdco loan or mezzanine financing, a transaction in which a project sponsor or a project developer finances all or a portion of its equity contribution in the project company or holding company with third party loans.

What is back end leverage?

Back-end leveraging strategies, commonly referred to as Insured Retirement Plans (IRPs), are designed to supplement RRSP or RPP income. Apply for life insurance. Get the policy approved. Get a loan from a lender or establish a line of credit.

What is leverage and deleverage?

At the micro-economic level, deleveraging refers to the reduction of the leverage ratio, or the percentage of debt in the balance sheet of a single economic entity, such as a household or a firm. It is the opposite of leveraging, which is the practice of borrowing money to acquire assets and multiply gains and losses.

What is Holdco leverage?

Holdco Leverage Ratio means, at any time, the ratio of (a) the outstanding principal amount of Indebtedness of the Holdco Consolidated Entities at such time to (b) Historical Consolidated EBITDA of the Holdco Consolidated Entities at such time.

What is the purpose of Holdco?

A holdco is also known as a parent company. The key purpose of a holdco is to “hold” (i.e., own) assets. The holdco itself can be held by a single person or company or a group of individuals or companies. The main purpose of holdcos is to limit liability.

What is tax equity financing?

Tax-equity financing broadly encompasses investment structures in which a passive equity investor looks to achieve a target internal rate of return based primarily on US federal income tax benefits derived from an investment in a particular asset.

What is a tax equity bridge loan?

Tax Equity Bridge: Bank is repaid at completion of construction with funds from tax investor, who will only come in once the plant produces tax credits.

What does leverage mean in finance?

Leverage is the use of debt (borrowed capital) in order to undertake an investment or project. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value.

How do you calculate deleverage?

Debt-to-equity (D/E) is calculated by dividing a company’s liabilities by shareholders’ equity. Debt-to-equity shows how a company is financing its growth and whether there are sufficient equity shares to cover its debt.

What is HoldCo vs OpCo?

What is a HoldCo / OpCo structure? A HoldCo / OpCo structure is simply one where we have a series of operating companies – often either diverse in the countries they operate in or with each OpCo being dedicated to one major corporate project – and a HoldCo that owns (holds) the equity of these operating companies.

What is the purpose of HoldCo?