Training
Provided by Financial Training Associates Ltd
PROJECT FINANCE MODELLING MASTERCLASS -
FOUR DAYS
Course provider
This course is provided by financial modelling training company
Financial Training
Associates Ltd. Financial Training Associates supplies experienced finance course trainers to clients who wish to provide financial markets training for small groups of their employees. See financialtrainingassociates. com for company contact details.
Day 1: model build up
Developing inputs and assumptions
a Principles of building a transaction model
a Building assumptions off the term sheets
a Using the assumption sheets as a sign-off document
a Accommodating flexible project timing
Effective modelling of key cash flow components
a Modelling revenue and cost build up
o Revenue, fixed and variable cost build up
a Build up of construction or other capital costs
o EPC contract, contingency and cost overruns
Handling capital expenditure during operations
a Flexible calculation of operational capex, such as maintenance capex
a Use of maintenance reserve accounts
a Setting up a dynamic capex reserve account for large capex items
a How to treat operational capex and calculate depreciation
Modelling taxes and depreciation
a Tax treatment of costs
a Allowing for deductibility and non-deductibility
a Capital allowances
a Cash versus accounting treatment of taxes
a Calculating depreciation flexibly and efficiently
o A quick method for calculating depreciation against operational capex
o Calculating depreciation for tax and accounting purposes
Day 2: finance structure
Finance structure: overview
a Building up sources and uses of funds
a The impact of fees: upfront and spread
a Leverage, risk and the debt: equity equation
a The cost of capital
o Determining the cost of different types of debt capital (redeemable, irredeemable etc)
o Calculating the cost of equity capital
o Discount factors and tables; continuous compounding
a Risk adjusted return on capital: equitya ™s view vs. the lendera ™s view
a Overview: incorporating the timing of debt and equity funding
Sculpting debt repayments
a Introduction to different debt sculpting methods and when they should be applied
a Building and modelling different debt repayment methods
o Mechanics for an annuity repayment (constant P&I)
o Incorporating flexible debt term and interest only periods
o Sculpting repayments to a target
DSCR
o Cash sharing as an alternative repayment method
a The impact of refinancings
o Refinancing a construction facility
a Modelling multiple drawdowns
o Cash flow driven
o Cash positive periods and interest earned
o Fees to be included in drawdown amounts
o Multiple facilities
Incorporating a debt service reserve account
a Explanation of the
Debt Service
Reserve Account (
DSRA) and why it is used
a Modelling the funding of and releases from the account
a Testing the DSRA in the model
a Linking the DSRA into cash flow
a Forecasting forward, and linking forecasts to the DSRA
Incorporating a cash sweep
a Standard cash sweeps
a Payback dates
a Incorporating a flexible start date for the cash sweep
a Relationship and linking the cash sweep to live debt accounts and balances
a Graphing the cash sweep against the live debt accounts and balances
Day 3: mezzanine interest and returns
The use of mezzanine
a What is a mezzanine facility used for?
a Using mezzanine debt as a source of funds during construction
a Modelling repayment and interest for a mezzanine facility
a Linking the mezzanine facility to cash flow
Modelling interest
a Calculating interest costs
a Capitalising interest
a Modelling Interest during construction (IDC)
a Interest rate ratchets
a The impact of rate switches
a Operational interest calculations
a Linking it to the model
Circular references
a Circularity and consequences
a What triggers a circular reference?
a Tools for breaking the circular reference
a Avoiding circular references
Developing key ratios and analytical features
a Calculating DSCR for senior and mezzanine providers
a Preparing and analysing outputs from multiple scenarios
a Building an effective summary sheet for the model
a Other common ratios aside from DSCR (ICR, LLCR, PLCR)
a DSCR lock up scenarios
Measuring returns
a Modelling dividend and other equity returns
a Constraints on dividend payments
a Calculation of gearing at completion
a Overall risk profile
a The link from free cash flow to valuation: using free cash flow to value the project
a The significance of terminal (residual) value and how to calculate it
a Project and equity future present value, net present value and IRR
a Comparison of MIRR against IRR
Day 4: analysing scenarios and calculating debt capacity
Coping with project delays
a Why a delay scenario may occur
a Setting up a flexible delay scenario
a Implementation and analysis of delay scenarios
a Use of look up functions to change expenditure timings
Incorporating escalation factors
a Real vs. nominal: applying escalation factors accurately
a Making use of indices
a Controlling start time and linking to an inflationary pattern
a Applying different rates to different revenue and cost items
a Varying inflation rates over the life of the project
Working with scenarios a building in other sensitivities
a Incorporating risk
a Use of risk matrices
a Using scenario manager vs. doing it yourself
a Stress testing the project
a Focussing on the key outputs: the break even analysis
a Modifying trends: cyclical and seasonal variations
Calculating debt capacity
a The challenge: optimising against different covenants
a Calculating and sizing debt against specific constraints
a Sizing debt against a constant minimum DSCR
a Using goal seek as an optimisation tool
a Outputting into data tables: using data tables to determine debt capacity
Please see financialtrainingassociates. com for company contact details
| This is primarily ilt training |  | Contact Financial Training Associates Ltd for more information |
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| Course Level: | intermediate | | Duration: | 4 days | | Training Presented in: | English |
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