NINETH LESSON

Financing and Funding

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 CONTENTS

• ENTERPRISE FINANCING & PROJECT FINANCING

• THE INTERNATIONAL FINANCE MARKETS & THE BASIC
FORMS OF FINANCING
• GUARANTEES AND RECOURSES
• FUNDING A PROJECT
• THE CONDITIONS FOR A PROJECT FINANCING

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 ENTERPRISE FINANCING and PROJECT FINANCING

The Differences

The reasons for the rise of the Project Financing

The “Ring Fencing”

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 THE INTERNATIONAL FINANCE
MARKETS
THE BASIC FORMS OF
FINANCING

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
Enterprise Economics and Management
UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 GUARANTEES AND RECOURSES

(Garanzie e Rivalse)

• LOANS WITH RECOURSE (Finanaziamenti pro solvendo)

• LOANS with LIMITED RECOURSE (additional securities / commitments)

• LOANS WITH NO RECOURSE (Finanziamenti pro soluto)

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 TANGIBLE SECURITIES (Garanzie Reali)

CONTRACT GUARANTEES (Garanzie Contrattuali)

COMPENSATION GUARANTEES (Garanzie di Rivalsa)

Typical Contractual Guarantees :

Delivery Guarantee
Completion Guarantee
Performance Guarantee
Liquidity Guarantee
Covenants
Take or Pay

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 FUNDING A PROJECT
•Life Cycles and different Phases of an
Organization
• EQUITY FUNDING

• RECOURSE FINANCING

1. Buyer’s Credit

2. Supplier’s Credit

3. Mixed Credit

• PROJECT FINANCING

Enterprise Economics and Management

(
UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 CREDIT INSURANCES

EXPORT CREDIT AGENCIES (ECA’s)

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it
 THE CONDITIONS FOR A PROJECT FINANCING

The Promoters make the Investment through a SPV (Special

Purpose Vehicle) - RING FENCING –

The Lenders have ascertained that the Project has a strong

capacity to generate Cash Flows (“Hot” Projects)

The Cash Flows originated by the Operation of the Goods

realized by the Project represent the main GUARANTEE for the
reimbursement of the LOAN

The “RECOURSE” system is mainly Contractual

Enterprise Economics and Management

UNIVERSITA' CAMPUS BIO-MEDICO DI ROMA Facoltà di Ingegneria
www.unicampus.it