Pretty much any group of people embarking on a business together will prepare some form of budget. Project finance is distinguished by the unusual care and formality with which this is done, which extends to lenders insisting on receiving a financial model of the venture, and, at least in Europe, subjecting it to an independent audit before they release any money.
The job of the financial model auditor is not to say whether the project is a good one or a bad one. The task is to confirm that the model matches the legal documents that govern the project. A generation ago, if the two didn’t match, the presumption was that the model needed altering to align it with the documents. Nowadays, it is at least as often the documents that are changed.
A market leader in financial modelling, Operis is continually innovating when it comes to financial modelling courses and now offers a course designed to provide a rigorous understanding of how to draft loan agreements and covenants that make mathematical sense.
It is aimed at bankers preparing term sheets; lawyers turning those into full credit agreements; and bid directors within project promoters who need to bring their transactions to a successful close. It is particularly relevant to experts in these organisations who are the custodians of the internal templates from which these documents are derived.
The course works interactively through real-world examples to cover topics that everyone involved in a project finance transaction should be equipped with sufficient knowledge to understand, such as:
• The relevant data and results which a financial model produces
• Variants of debt cover ratios, and the commercial trade-offs in defining them and the specification of escalation clauses
• The considerations needed to make them implementable in practice
The course can be delivered over a single day, or over 2 to 3 separate sessions.
Initial feedback on the course offered by Operis has been positive with certain aspects of the course pinpointed as useful such as ratio calculation and better understanding how firms can reflect the financial models when drafting documents.
“Really useful session to better understand how we can better reflect the financial models in our drafting. The examples & putting what we discussed into practice really made it come to life/ make sense. Looking forward to the next session.” Partner at Linklaters
“One of the best training sessions I’ve ever been to. Would love more from these guys.” Partner at Norton Rose
“Thank you so much for this morning’s talk – exceptional and the team were really excited.” Partner at Berwin Leighton Paisner
To find out more about our Aligning Contracts & Financial Models course and book your place on an upcoming session, contact Ben Lyon.