FINANCIAL RISK MANAGEMENT
IN STRUCTURED FINANCING
Transforming a constraint into a decisive advantage for your business
Both businesses and investors sometimes use specific forms of lending to finance their growth or their investments. These transactions, which are referred to as structured financing (leverage finance, asset or project finance, securitisation) often come with hedging obligations imposed by the lenders. These obligations have a serious impact on profitability and can sometimes even affect the structure.
Here at Noveo Finance we have been working on these subjects for several years with the most demanding actors. With our understanding of the challenges and our detailed knowledge of the constraints of these complex transactions, we can provide you with expertise suited to your requirements at each stage of your transaction. We are confident that you will find our propositions attractive, particularly as they consistently achieve significant cost savings.
Having Noveo Finance’s specific skills and experience within your teams is an asset that helps you optimise the financing of your project and monitor its performance.
Why use a specialist ?
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Hedging is crucial : hedging accounts for a significant part of a project’s cost of debt or cost of construction and can quickly affect the return on the investment.
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A project’s characteristics sometimes impose specific constraints which a straightforward hedging strategy cannot address effectively.
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Within a consortium, the strategies and the constraints/objectives of each investor can diverge. It is important to be able to access the most innovative solutions in order to resolve these challenges in the best way possible.
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Ensuring compatibility of the hedges with the financing documentation requires significant experience; it is too often neglected to the detriment of the borrower.
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It is important to be well prepared for the commercial, technical, accounting and even regulatory discussions in order to safeguard the return on the investment and to make the closing process smoother.
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Using a specialist means ensures you can challenge banks’ propositions and pricing, accountants’ recommendations and lawyers’ documentation, all of which will improve the deal.
Why Noveo Finance ?
We believe that we have compelling strengths that enable us to support demanding clients in this sector.
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Our well-established expertise in financial markets, derivatives and their uses in a hedging strategy
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Our long experience of structured financing
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Our rigorous, tried-and-tested approach
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Our active presence in the market to ensure we know the most recent swap margin levels applied to transactions of this type
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The particular attention we pay to analysing the project as a whole and back testing alternatives in order to methodically study performance
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Independence and confidentiality
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Flexible remuneration
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Complete transparency in our recommendations and a commitment to transfer our skills to enable you to develop your own know-how
INNOVATIVE SOLUTIONS
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Prehedging any market risk
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Designing a flexible hedging solution to cope with construction period uncertainties
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Accounting for the exit strategy of the sponsor
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Taking into account forecasts and market conditions to select the most suitable instrument.
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Considering accounting impact when presenting solutions
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Mini-perm financing
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multi-tranche financing
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inflation indexed financing
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Multi currency risks at various stages of the investment
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Synthetic financing in currency
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Acting as a hedge coordinator to manage multi hedging banks deals
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Maximising swap syndication processes
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