Training Courses - Project Finance Modeling
Transaction
Training
Model
Client
T201
Project Finance Modeling
Overview
Project Finance Modeling (T201) is a 2-day course that will teach you how to build a financial model to evaluate equity returns and secure non-recourse debt (or ‘project’ finance).
The course builds on the techniques and knowledge acquired in the pre-requisite course, FAST Modeling Skills (T101). Participants will be taught to apply general business and non-recourse finance theory to forecast cash flows associated with ‘green-field’ projects and special-purpose project companies. At the conclusion of the course attendees will have constructed a fully-functional financial model covering the period from the beginning of construction through to the end of the project’s operating period.
Please note the course fees below exclude VAT, which will be added to all invoices.
| Date | Location | Price | Status |
|---|---|---|---|
| t.b.a. | Johannesburg | $2,000 | 6 places available |
| 11 Dec 08 - 12 Dec 08 | London | £1,900 | 7 places available |
| 5 Feb 09 - 6 Feb 09 | London | £1,900 | 12 places available |
| 26 Feb 09 - 27 Feb 09 | London | £1,900 | 12 places available |
Target audience
Project Finance Modeling is aimed at those who need to build, modify and/or understand financial models associated with project finance transactions, usually infrastructure related and including new, ‘green field’ and PPP/PFI investments.
The course is aimed at associates with some modeling experience who have responsibility within their organization for developing or running a project finance model. Participants without prior knowledge of business theory, project finance, and basic model-building skills will struggle to keep up with the pace of this course. Attendance on FAST Modeling Skills (T101) is a prerequisite for Project Finance Modeling. As well, prior attendance on Unwrapping the Cash Flow Model (C201) may be advisable depending on your experience.
Teaching approach
Consistent with all Financial Mechanics T-series courses, Project Finance Modeling is a hands-on course with limited lecturing or speaking to PowerPoint slides. Attendees follow along with the instructor, building their own financial model on their own computers; in this way they immediately practice what they have been taught and can confirm their understanding of project finance principles and modeling techniques.
The course also applies FAST Modeling, namely producing models that are flexible, accurate, structured, and transparent, i.e. avoid complex formulas so they are simple to follow even if the subject-matter is complicated.
Agenda
Day 1 introduces attendees to the primary modeling requirements for a 'green field' investment or special-purpose project company. Participants will commence from the basic corporate business model completed in FAST modeling Skills (T101) and add calculations for construction-period capital costs and financing. This course will also more fully develop the cash flow waterfall (a.k.a. payments cascade) and basic period-by-period cover ratio calculations that form the heart of most structured finance transactions.
Topics covered on Day 1 include:
• Construction financing: simple pro rata, single-tranche construction
loan with residual equity funding, arrangement fees and
LIBOR-based interest calculations, and impact of financing on
accounting and tax depreciable bases.
• Term financing: senior term loan further developed from T101,
including primary period-by-period debt service cover ratios and
'sculpted' repayment profiles.
• Model design: introduction to dual-time resolution modeling (monthly
construction vs. semi-annual repayment/operations periods),
transferring values between periods simply and efficiently.
Day 2 moves on to more advanced, yet common elements of project finance, including calculation of loan-life cover ratios, equity return calculations within dual-time period models, debt service reserve account deposit / release logic, and shareholder loans. Each of these components is built upon the well-designed, multi-sheet model structure developed by the participant during Day 1. Additional topics such as non pro-rata funding, construction-period escrow accounts and equity bridge loans are also discussed, though not actively modeled.
Instructor
John Richter is the instructor for this course. John was formerly a principal instructor for F1F9, a specialist financial modeling company that now licenses its training courses exclusively to Financial Mechanics. He has over 20 years experience in project finance and has been teaching advanced courses in financial modeling, as well as running his own modeling services company, for the past 8 years.
In partnership with his former colleague at F1F9, John developed the principles of FAST modeling; an approach to financial modeling adhered to by leading financial institutions and other organizations around the world. He has a BSc in Mechanical and Aerospace Engineering (1985) from Princeton University and an MBA (1992) from Harvard Business School.
Requirements
Attendees must be intimately familiar with the principles and specific techniques of FAST modeling which is applied throughout the Project Finance Modeling course. Preferably this knowledge should be obtained from reasonably recent attendance of the FAST Modeling Skills (T101) course followed by some practical on the job application. If you feel you may qualify without such a credential, you must contact us to see if this course pre-requisite can be waived.
Attendees will need to bring a laptop with them, ideally one they are accustomed to using, with a Microsoft Windows operating system and MS Excel loaded. Laptops may be rented from Financial Mechanics for an additional charge.
Attendee comments
Here are some comments from past course attendees:
Very logical, structured ‘take a step back approach’. Good examples
Clear descriptions of principles and issues
John is good at maintaining the course at a reasonable pace and making the material interesting and relevant.
Clear and concise training. Makes the subject generally interesting and addresses individual’s queries. Great with a difficult topic
Very helpful and enthusiastic. Explained issues well and was prepared to answer questions
Excellent instructor, moved fast at times but perhaps not for people with exposure to material, still very helpful.
I found this an extremely useful course as it is directly relevant to my day to day job and was taught very clearly and thoroughly. Will recommend
Very useful, makes one more efficient and aware of what is going on in a model