Project Finance Linked Hedging
Audience: This course is aimed at those working within, or intending to move into, project development or project finance - including legal advisers, transactors and principals - whether from the financier, project company or sponsor side.
The course will be divided into five short modules:
1. An introduction to the principles of project finance (2 hours)
This module will provide an understanding of the basic principles underlying a typical project finance transaction including: defining project finance, introducing the relevant counterparties, differentiating it (as a concept) to corporate finance, risk allocation and mitigation, the limited recourse concept, financing methods, construction and operation phases in a project finance transaction, PPP's (as a concept), as well as providing a brief run-down of the documents typically involved in a project finance transaction.
2. Instruments used to hedge project risks (0.5 hours)
This module will cover the instruments typically used to hedge project risks (including fluctuations in interest rates, currency and commodity prices) and will explain how these fit in to the overall project financing structure.
3. The Facility Agreement / Common Terms Agreement (1 hour)
This module will identify and explain the clauses relevant to the hedge, including positive and negative undertakings, account controls, cash flows and waterfalls as well as the hedging policy/strategy.
This module will also explore the security position of the hedge provider and its rights as a finance party under the finance documents.
4. The Intercreditor Agreement (1 hour)
This module will address the rights of the finance parties under the Intercreditor Agreement, including the rights of the hedge providers in contrast to the other finance parties (including independent rights of termination/close out, restrictions, rights on a default and rights on enforcement etc.).
5. The Schedule to the ISDA® Master Agreement (1.5 hours)
This module will explore the provisions of a typical Schedule to the ISDA® Master Agreement in a project finance transaction and explore the interplay between the Schedule to the ISDA® Master Agreement and the other finance documents. It will talk to clauses which can be disapplied in the ISDA®, bespoke clauses required for additional termination events and additional events of default, reliance on the finance documents as well as general rights of termination and enforcement.
Duration: 8 hours (9am – 5pm)
Cost: R8 500 per person (excluding VAT)