Project & Infrastructure Finance: Mastering the Core Finance Documents

The Senior Facilities Agreement (SFA): key terms

• This advanced project finance documentation course begins by exploring document structure and precedent (LMA influence)

• Facilities overview – use and application (not all present in every deal): Term loan / Construction / Baseline facility

• Standby facility

• Equity bridge facility

• Change of law facility

• VAT facility

• RCF / working capital facility

• LC facility

• Cost-over-run facility

• ECA facility

• Bonding

Term / Tenor considerations:

• Life of concession

• Estimated useful life of the asset

• Mini-perms

Examples and solutions

Risk mitigating strategies

Repayment profile:

• Mortgage/annuity repayment style

• Percentage of available cash flow

• Level repayment

• Structured (uneven)

• Royalty basis

• Bullet repayment (rare)

Reserve styles - use and application:

• Debt service reserve

• Maintenance reserve

• Capex reserve

• Environmental / reinstatement reserve

• Tax reserve

Margins & yield protection:

• Margin ratchets

• ESG ratchets

• Gross up

• Mandatory costs

• Increased costs

• Call protection

• MFN & sunsets (relevant in expansion or phased projects)

• Yank the bank

Key voting thresholds & why they matter:

• Unanimous consent

• Majority lender concept

• Super majority

Covenants/undertakings structure – Europe vs US format

Information covenants (coverage):

• Budget, Annual Report

• Reporting (Construction, Completion, Operating)

• Reporting Standard

• Site Access

• Inspection of records

• Compliance Certificates, Sweeper clauses, Notices

General Undertakings (summary):

• Negative Pledge

• Environmental compliance

• Compliance with all laws and regulations

Financial Maintenance covenants – pros & cons, use and application:

• ADSCR (Annual Debt Service Coverage Ratio)

• Loan Life cover

• Project Life cover

• Drawdown cover

• Other less common financial covenants (Debt/Equity)

Equity cures:

• Timing

• How are they implemented

• How many over the loan life

• Cash retention vs debt repayment

• Look back or forward?

Events of Default (key EoDs only); Key negotiating issues:

• ‘Evergreen’ Reps & Warranties

• Force majeure

• Materiality thresholds (as in material breach)

• Grace periods – typical periods

• Cross default vs cross acceleration – materiality thresholds

• Deemed cures conclude this section of the project and infrastructure course

Security, & Guarantees & Credit support

• Taking security in project finance transactions: Key considerations – controlling the project, influence in distress

What security is available:

• Project level – typical coverage & problems

• Shareholder – typical coverage & problems

• The ‘ideal’ security package for lenders

• Quasi security

Guarantees

Negative pledge

Sponsor support:

• Completion guarantees

• Specific Issues and pitfalls in foreign jurisdictions

Bonds (summary and overview):

• Tender guarantees or bid bonds

• Advance payment guarantees or bonds, or bonds for off-site goods and materials

• Performance guarantees and bonds

• Retention and maintenance retention guarantees or bonds

• Difference between "On demand" bonds vs Guarantees

Monoline Insurance

Suretyship

Step in rights

Intercreditor / Subordination Agreements

• The payment waterfall

• Cash traps: DSCR

• Release

• Priority

Release of Security

Enforcement standstills

Turnover clause

Step in rights

Training Objectives

Upon completion of this project finance documentation course, participants will be able to:

• Evaluate and negotiate critical clauses in the Senior Facilities Agreement from the lender and sponsor perspectives

• Structure appropriate facility types and understand their application across different project scenarios, including: Construction facilities

• Standby facilities

• Cost-overrun facilities

• Working capital arrangements

Design optimal repayment profiles and reserve mechanisms tailored to project cash flow characteristics

Negotiate margin structures, yield protection provisions and ESG-linked pricing mechanisms in project finance transactions

Implement effective financial covenant packages, including ADSCR, loan life cover and equity cure provisions

Design and install comprehensive security packages at both project and sponsor level, understanding lender priorities in controlling the project and maximising influence in distress scenarios

Structure robust sponsor support mechanisms, including completion guarantees, and navigate jurisdiction-specific pitfalls

Design effective intercreditor arrangements, including:

• Payment waterfalls

• Cash trap mechanisms

• Enforcement standstills

• Voting mechanisms in multi-source project financings

Craft robust finance documents that anticipate and mitigate potential disputes throughout the project lifecycle

Integrate ESG considerations into project finance documentation, including ESG-linked margin ratchets and covenants

Training Course Summary

Project & Infrastructure Finance: Mastering the Financing Documentation Suite is an intensive programme designed for experienced professionals involved in project and infrastructure finance transactions.

This practical programme provides comprehensive coverage of the three pillars of project finance documentation:

• The Senior Facilities Agreement

• Security arrangements

• Intercreditor structures

The course examines these critical agreements from both sponsor and lender perspectives. It will provide a balanced understanding of each party's interests and objectives. Participants will gain deep insights into structuring Senior Facilities Agreements, including the selection and application of different facility types, negotiation of financial covenants and margin structures, and implementation of ESG-linked provisions.

The programme also explores how to design robust security packages at both the project and sponsor levels. Particular focus is on lender considerations around controlling the project and maximising influence in distress scenarios.

A large part of the course addresses intercreditor arrangements. This will include payment waterfalls, cash trap mechanisms, enforcement standstills and voting structures in multi-source financings. The course covers the challenges of cross-border transactions, the harmonisation of Sharia law with international project finance practices, and addresses jurisdiction-specific issues in taking security and enforcing guarantees.

Tailored for lawyers, banking and finance professionals, investment managers, corporate finance executives, consultants and other parties involved in this sector, project and infrastructure finance courses offer a valuable opportunity to deepen understanding of current market practices and refine advanced negotiation techniques.

We equip attendees to apply their learning directly to complex transactions and deliver optimal outcomes in this dynamic and challenging field.