Profit – Atriunfar http://atriunfar.net/ Mon, 23 Aug 2021 08:49:14 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://atriunfar.net/wp-content/uploads/2021/06/icon-3-150x150.png Profit – Atriunfar http://atriunfar.net/ 32 32 Romanian net profit of Banca Transilvania jumps 48% year-on-year in first half https://atriunfar.net/romanian-net-profit-of-banca-transilvania-jumps-48-year-on-year-in-first-half/ https://atriunfar.net/romanian-net-profit-of-banca-transilvania-jumps-48-year-on-year-in-first-half/#respond Mon, 23 Aug 2021 08:15:00 +0000 https://atriunfar.net/romanian-net-profit-of-banca-transilvania-jumps-48-year-on-year-in-first-half/ BUCHAREST (Romania), August 23 (SeeNews) – Banca Transilvania de Romania [BSE:TLV] said on Monday that its net profit increased 48.3% year-on-year in the first half of 2021 to 901 million lei ($ 213 million / € 183 million). If the pressure on revenues led to a high level of provisioning during the year 2020 due […]]]>

BUCHAREST (Romania), August 23 (SeeNews) – Banca Transilvania de Romania [BSE:TLV] said on Monday that its net profit increased 48.3% year-on-year in the first half of 2021 to 901 million lei ($ 213 million / € 183 million).

If the pressure on revenues led to a high level of provisioning during the year 2020 due to the health and economic crisis, in the first half of 2021 this pressure decreased, the level of provisions reflecting confidence and the ability to recover thanks to the positive trend in income, the lender said in an unaudited first half financial report filed with the Bucharest Stock Exchange, BVB.

“This is a revival period for Romania, and Banca Transilvania has once again contributed to this process, increasing lending and transaction processing above the market average. We are the bank of Romanians, we manage a volume of operations vital for the economy. and we have more than 7 million Romanians as direct and indirect shareholders ”, said Omer Tetik, CEO of Banca Transilvania. “We are optimistic about the development of the economy and the country, so we are putting our efforts to continue their growth and reduce the gaps with the economies of Western Europe.”

The bank’s operating profit amounted to 2.169 billion lei in the first half of 2021, compared to 1.858 billion lei in the same period in 2020. At the end of June, the assets of Banca Transilvania amounted to 111 billion of lei, against 103 billion lei at the end of June. 2020.

Net lending reached 43 billion lei at the end of June, against 42.6 billion lei at the end of June 2020. The bank had more than 3.14 million private customers, 360,000 SMEs and micro-clients and more than 11,000 client companies at the end of June.

Customer deposits reached 94.4 billion lei in the first half of 2021, compared to 93.9 billion lei at the end of June 2020.

Non-performing loans represented 3.47% of Banca Transilvania’s total loan portfolio at end-June, while their coverage with related provisions and mortgage guarantees remained at a comfortable level of 148% and in line with the appetite for debt. bank risk.

During the first half of 2021, the balance of provisions increased by 9.2% to reach 3.485 billion lei, compared to 3.19 billion lei at the end of June 2020.

Blue-chip Banca Transilvania is Romania’s largest private bank. Its net profit fell 26% year-on-year in 2020 to 1.197 billion lei.

The Banca Transilvania group, which also includes the Moldovan lender Victoriabank, BT Leasing Transilvania IFN, BT Direct IFN, BT Microfinanţare IFN, BT Leasing MD and BT Asset Management, posted a net profit of 1.015 million lei in the first half of 2021, in increase of 47.2% year on year. The group’s assets stood at 115 billion lei at the end of June, compared to 107 billion lei compared to the end of 2020. The group employed 10,066 at the end of June.

Banca Transilvania shares traded up 0.67% to 3 lei on the Bucharest Stock Exchange on Monday at 9:36 am CET.

(1 euro = 4.9338 lei)

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Banks withdraw from forgiveness of PPP loans https://atriunfar.net/banks-withdraw-from-forgiveness-of-ppp-loans/ https://atriunfar.net/banks-withdraw-from-forgiveness-of-ppp-loans/#respond Sun, 22 Aug 2021 12:00:00 +0000 https://atriunfar.net/banks-withdraw-from-forgiveness-of-ppp-loans/ At least three big banks have opted out of a new process to get Paycheck Protection Program loans canceled directly by the Small Business Administration, The Intercept has learned, leaving their small business clients no other recourse if the banks refuse to cancel loans or drag out the process. Bank of America, JPMorgan Chase and […]]]>

At least three big banks have opted out of a new process to get Paycheck Protection Program loans canceled directly by the Small Business Administration, The Intercept has learned, leaving their small business clients no other recourse if the banks refuse to cancel loans or drag out the process.

Bank of America, JPMorgan Chase and PNC have all decided to step down, according to emails shared with The Intercept.

They are major players in the program, which Congress created to provide loans to businesses to spend on payroll and other qualifying expenses to help overcome closures. At the end of May, JPMorgan Chase was the number one PPP lender, followed by Bank of America in second place; PNC is No. 11. In total, lenders representing only half of all outstanding PPP loan cancellation requests have opted, according to the SBA.

PNC recently emailed Jesse Grund, owner of Unconventional Strength personal training studio in Orlando, Florida, saying, “Considering we’ve already built a streamlined end-to-end digital portal and review process. partner for your PPP pardon request; we will refuse to use the SBA Forgiveness Portal.

Grund still did not get his $ 5,000 PPP loan canceled and instead the PNC told him that his “correct maximum loan amount” was only $ 917, leaving him on the hook for the rest. . “It’s PNC’s fault that I got this money,” he said. “Now you want to come back to me for that. “

At the onset of the pandemic, small business owners were urged to flock to the Paycheck Protection Program. The loans were made with the promise that they would be canceled and essentially turned into grants if used properly.

But many small business owners have struggled to get their loans canceled by the banks that issued them. Banks have been enticed to issue PPP loans because of the fees they have generated, but they do not charge any fees to pass the pardon, and they have dragged their feet. Of the total PPP loans that have been issued, less than half have been canceled so far.

In response, the Small Business Administration, the government agency responsible for managing the program, announced in late July that it would offer small business owners who took out PPP loans of $ 150,000 or less a way to bypass intransigent banks. and to ask for forgiveness directly from the agency. . Congress had, at one point at the end of last year, considered automatically waiving all loans under $ 150,000, but never followed through.

But there was a fine print in the recent SBA announcement that many may have missed: Banks actually have to go through the direct process for small business owners to access it. And at least three greats refused.

“Forcing lenders to go into the process could have been disruptive,” SBA spokesman Terrence D. Clark said in an email. He noted that lenders continue to participate and the agency is carrying out outreach activities to encourage them to participate. “[W]e talk to lenders every day, ”he said. In a statement, Patrick Kelley, SBA associate administrator for the Office of Capital Access, said, “We encourage all lenders to join this tested portal.”

When asked to explain why the bank decided to ban its customers from the SBA’s direct forgiveness option, a PNC spokesperson pointed to a statement that read: “[L]enders who participate in the SBA Forgiveness Portal are still responsible for reviewing and issuing forgiveness decisions to the SBA. So we would always need to make sure that borrowers meet the loan eligibility and forgiveness requirements, whether or not we choose to use the SBA’s remittance portal.

Chase offered no explanation in his correspondence to his clients. In an email to a small business owner, he simply said, “[W]We continue our simple process and do not participate in the new direct SBA program. In response to a request for comment, a spokesperson for Chase said via email, “Chase customers must submit their pardon requests through our platform,” adding, “We have a simple process that takes less time. of 10 minutes.

For some business owners, being cut off from the SBA direct program could mean they can’t get some or all of their loans canceled at all. Some banks have contacted small business owners in recent months and told them they should not have received the original amount they received – which the banks themselves have approved – and demanded owners that they reimburse the difference. But many told The Intercept that they were using the money correctly and expected their entire loans to be canceled.

This is what happened to Warren Davis, owner of fundraising consultancy Warren Davis Consulting, LLC, who received his loan from Chase and was recently told the bank would not let him beg for forgiveness directly. at the SBA. After the bank initially granted him a PPP loan of $ 6,812, he was later told that he was only entitled to a $ 1,795.53 cashback. Now he has to pay Chase $ 460.01 on the first of every month, with two years to pay off the rest of the loan. “This loan payment is the second highest payment I have now on top of my rent, which is also due on the 1st,” he said in an email. “I tried to get answers from Chase several times without success over the months.”

Responding to situations like Davis’, the spokesperson for Chase said, “Small businesses have to meet the standards in order to qualify for a rebate, whether they go through their lender or directly through the SBA.

When asked why Bank of America has unsubscribed, spokesman Bill Halldin said, “Because our portal is simplified and has been around for six months,” adding that if the bank does opt, “we will have to develop a new interface ”. The bank is considering whether to join the SBA process, but “at this point our streamlined portal is delivering what people want,” he said.

But this portal does not provide what Amy Yassinger needs. Yassinger, owner of a music company that offers party bands for weddings in Illinois, was encouraged by Bank of America to apply for a PPP loan early in the pandemic. The bank helped her with the process, assuring her that her underwriting team “would make sure everything was solid,” she said in an email. She used the $ 38,730 to pay employees as if they were working on their regular event list, despite widespread cancellations, as well as to cover some non-salary expenses.

Still, 11 months after getting her loan, the bank told her it would only submit $ 2,436 to the SBA for a remission. “It was one thing that my life was completely shattered for over a year because my business was forced to cancel or postpone over 60 events in 2020,” she said. “It is quite another to ask Bank of America to recover $ 36,000 out of $ 38,730 over the next 5 years. “

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Securities fraud class action filed against Rocket Companies, Inc. https://atriunfar.net/securities-fraud-class-action-filed-against-rocket-companies-inc/ https://atriunfar.net/securities-fraud-class-action-filed-against-rocket-companies-inc/#respond Sat, 21 Aug 2021 16:10:00 +0000 https://atriunfar.net/securities-fraud-class-action-filed-against-rocket-companies-inc/ Radnor, Pa .– (Newsfile Corp. – Aug. 21, 2021) – Law firm Kessler Topaz Meltzer & Check, LLP reminds investors at Rocket Companies, Inc. (NYSE: RKT) (“Rocket”) that one category securities fraud lawsuit has been filed on behalf of those who purchased or acquired Class A common stock of Rocket between February 25, 2021 and […]]]>

Radnor, Pa .– (Newsfile Corp. – Aug. 21, 2021) – Law firm Kessler Topaz Meltzer & Check, LLP reminds investors at Rocket Companies, Inc. (NYSE: RKT) (“Rocket”) that one category securities fraud lawsuit has been filed on behalf of those who purchased or acquired Class A common stock of Rocket between February 25, 2021 and May 5, 2021, inclusive (the “Class Period”).

Deadline Reminder: Investors Who Have Purchased or Acquired Class A Common Shares of Rocket during the Class Action Period may, no later than August 30, 2021, seek to be appointed as principal applicant representative of the group. For more information or to find out how to participate in this dispute, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453; toll free at (844) 887-9500; by e-mail to info@ktmc.com; Where Click on https://www.ktmc.com/rocket-companies-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=rocket

Rocket is an online mortgage lender that operates the Rocket Mortgage online platform, which allows clients to apply for and manage mortgages over the Internet or using Rocket’s proprietary mobile phone application. Ninety percent of Rocket’s income comes from creating, closing, selling and managing mortgages. Rocket operates two main segments: (1) the Direct-to-Consumer segment; and (2) the partner network segment. In its network of partners, Rocket partners with third parties who use its platform to provide mortgage solutions to their clients. The partner network has lower operating margins because Rocket shares the profits with its partners.

The Class Period begins on February 25, 2021, when Rocket issued a press release titled, in part, “Rocket Companies Experiences Explosive Growth,” which announced Rocket’s financial results for the fourth quarter and full year of 2020 Rocket reported, among other things, a closed loan origination volume of $ 107.2 billion and a sales margin gain of 4.41% for the fourth quarter. Rocket pointed out that he had “[i]increased sales margin gain of 100 basis points year-over-year “in the quarter and”[i]Selling margin gain increased by 127 basis points year-on-year to 4.46% “for the full year. Throughout the Class Period, Rocket continued to tout its business activities and minimized the effects of competition on Rocket’s gain on sales margins.

The truth was revealed on May 5, 2021, when Rocket issued a press release announcing its first quarter results and second quarter outlook. Rocket has indicated he is on track to achieve closed loan volume in a range of just $ 82.5 billion and $ 87.5 billion and a gain on sales margins in a range of just 2. , 65% to 2.95% for the second quarter of 2021. At mid-term, this estimated sales margin gain was equivalent to a 239 basis point decline year-over-year and a decrease of 94 basis points sequentially, which was Rocket’s weakest quarterly gain on selling margin in two years. Following this news, the price of Rocket’s Class A common shares increased from $ 22.80 per share at market close on May 5, 2021 to $ 19.01 per share at market close on May 6, 2021, or a drop of nearly 17%.

The complaint alleges that throughout the Class Period, the Defendants made false and / or misleading statements and / or failed to disclose that: (1) Rocket’s gains on sales margins were contracting at the rate on higher in two years due to increased competition between mortgage lenders, an unfavorable move towards the operational segment of the low-margin partner network and the compression of the price differential between the primary and secondary mortgage markets; (2) Rocket was engaged in a price war and battle for market share with its main competitors in the wholesale market, which further squeezed the margins of the operating segment of Rocket’s partner network; (3) adverse trends were accelerating and, as a result, the margin gain on Rocket’s sales was on track to decline by at least 140 basis points in the first six months of 2021; (4) As a result of the foregoing, the favorable market conditions which preceded the Class Period and allowed Rocket to achieve historically high selling margin gains had disappeared while Rocket’s selling margin gains had returned to levels not seen since the first quarter of 2019; (5) rather than remain high due to increased demand, Rocket’s gain on selling margins fell significantly below recent historical averages; and (6) as a result of the foregoing, the defendants’ positive statements about Rocket’s business operations and outlook were substantially misleading and / or lacking reasonable basis.

Rocket investors can, no later than August 30, 2021, seek to be appointed as the lead representative of class claimants through Kessler Topaz Meltzer & Check, LLP, or another lawyer, or may choose to do nothing and remain an absent member of the class. A principal plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be named the Principal Plaintiff, the Court must determine that the Class Member’s claim is typical of the claims of other Class Members, and that the Class Member will adequately represent the Class. Your ability to participate in any recovery is not affected by the decision whether or not to serve as the principal applicant.

Kessler Topaz Meltzer & Check, LLP pursues class actions in state and federal courts across the country regarding securities fraud, breach of fiduciary duty, and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force in corporate governance reform and has raised billions of dollars on behalf of institutional and individual investors in the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and participate in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information on Kessler Topaz Meltzer & Check, LLP, please visit www.ktmc.com.

CONTACT:

Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
280 route du Roi de Prussia
Radnor, Pennsylvania 19087
(844) 887-9500 (toll free)
info@ktmc.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/93930

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Arbor Realty (ABR) gains 2.48% to close at $ 17.80 on August 20 https://atriunfar.net/arbor-realty-abr-gains-2-48-to-close-at-17-80-on-august-20/ https://atriunfar.net/arbor-realty-abr-gains-2-48-to-close-at-17-80-on-august-20/#respond Sat, 21 Aug 2021 01:37:00 +0000 https://atriunfar.net/arbor-realty-abr-gains-2-48-to-close-at-17-80-on-august-20/ Last prize $ Last trade Switch $ Percentage of change % Open $ Previous Close $ High $ moo $ 52 weeks high $ 52 weeks low $ Market capitalization P / E ratio Volume To exchange ABR – Market data and news To exchange Today, stock of Arbor Realty Trust Inc. (NYSE: ABR) gained […]]]>

Today, stock of Arbor Realty Trust Inc. (NYSE: ABR) gained $ 0.43, an increase of 2.48%. Arbor Realty opened at $ 17.31 before trading between $ 17.81 and $ 17.16 throughout Friday’s session. The activity saw Arbor Realty’s market capitalization reach $ 2,530,384,650 on 1,400,974 stocks, below their 30-day average of 1,433,326.

About Arbor Realty Trust Inc.

Arbor Realty Trust, Inc. is a nationwide real estate investment trust and direct lender, providing loans and services for multi-family, senior housing, health care and other commercial real estate assets. various. Based in New York City, Arbor manages a multibillion-dollar service portfolio specializing in government-sponsored enterprise products. Arbor is a Fannie Mae DUS® and Freddie Mac OptigoSeller / Servicer lender. Arbor’s product platform also includes CMBS, bridges, mezzanine, and preferred stock loans. Rated by Standard and Poor’s and Fitch Ratings, Arbor is committed to building on its reputation for service, quality and personalized solutions with unparalleled dedication to providing our clients with excellence throughout the life of a loan. .

Visit the Arbor Realty Trust Inc. profile for more information.

About the New York Stock Exchange

The New York Stock Exchange is the world’s largest stock exchange by market value with more than $ 26 trillion. It’s also the leader in initial public offerings, with $ 82 billion raised in 2020, including six of the seven biggest tech deals. 63% of PSPC proceeds in 2020 were raised on the NYSE, including the six biggest deals.

To get more information about Arbor Realty Trust Inc. and keep up with the latest company updates, you can visit the company profile page here: Arbor Realty Trust Inc.’s Profile. For more information on the financial markets, be sure to visit Equities News. Also, don’t forget to sign up for the Daily Fix to get the best stories delivered to your inbox 5 days a week.

Sources: The chart is provided by TradingView based on 15 minute lag prices. All other data is provided by IEX Cloud as of 8:05 p.m. ET on the day of publication.

DISCLOSURE:
The views and opinions expressed in this article are those of the authors and do not represent the views of equities.com. Readers should not take the author’s statements as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please visit: http://www.equities.com/disclaimer


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NATO official pledges to speed up evacuations out of Afghanistan

Republican governors fight with schools for mask mandates

Binance to demand tougher client background checks to fight money laundering


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Global research on lending and origination systems market business strategy and demand by 2027 https://atriunfar.net/global-research-on-lending-and-origination-systems-market-business-strategy-and-demand-by-2027/ https://atriunfar.net/global-research-on-lending-and-origination-systems-market-business-strategy-and-demand-by-2027/#respond Fri, 20 Aug 2021 12:18:34 +0000 https://atriunfar.net/global-research-on-lending-and-origination-systems-market-business-strategy-and-demand-by-2027/ Recent exploration on “Global Loan and Loan Origination Systems Market report 2021 by key players, types, applications, countries, market size, forecast to 2027“Brought to you by Credible Markets, Industry is a comprehensive report which gives a selection of knowledge about the lending and provisioning systems business for new market players and established players. The report […]]]>

Recent exploration on “Global Loan and Loan Origination Systems Market report 2021 by key players, types, applications, countries, market size, forecast to 2027“Brought to you by Credible Markets, Industry is a comprehensive report which gives a selection of knowledge about the lending and provisioning systems business for new market players and established players. The report carefully examines each of the elements Fundamentals of Lending and Loan Arrangement Systems Market and gives a detailed overview of the development possibilities of the company.Along with this, the report further offers comprehensive data by user on the most recent market models, items industry as a whole and long-term revenue development designs. Analysts use graphs, outlines, pie charts, etc. to clarify information pictorially. Notwithstanding, to account for the number of market, different tables are added to display the information in a uniform structure. This helps users to understand dre information all the more effectively and unequivocally.

The study also covers significant market achievements, research and development, new product launch, product responses and regional growth of the most significant competitors operating in the market on a universal and local scale. The lending and loan origination systems market is segmented by type and by application. For the period 2021-2027, the growth among the segments provides accurate sales calculations and forecasts by type and by application in terms of volume and value. This analysis can help you grow your business by targeting qualified niche markets.

Request sample with full table of contents and figures and graphics @ https://crediblemarkets.com/sample-request/lending-and-loan-origination-systems-market-81113?utm_source=Akshay&utm_medium=SatPR

Key players in the global loan origination and loan origination systems market discussed in Chapter 5:

SPARK
Black Knight
Pegasystems
Wipro
Tavant Tech
Ellie Mae
Fiserv
Turnkey lender
DH Corp
Axcess Consulting Group
Mortgage creation software
CSV
ISGN Company
Juris Technologies
PCLender, LLC
Byte software
Calyx software
FICS
Mortgage rate (Accenture)
QB loan

In Chapter 6, on the basis of types, the Lending and Loan origination systems market from 2015 to 2025 is majorly divided into:

On demand (Cloud)
On the site

In Chapter 7, on the basis of applications, the Lending and Loan origination systems market from 2015 to 2025 covers:

Banks
Credit unions
Mortgage lenders and brokers
Others

Geographically, the detailed analysis of the consumption, revenue, market share and growth rate of the following regions:

  • North America (United States, Canada, Mexico)
  • Europe (Germany, United Kingdom, France, Italy, Spain, Others)
  • Asia-Pacific (China, Japan, India, South Korea, Southeast Asia, others)
  • The Middle East and Africa (Saudi Arabia, United Arab Emirates, South Africa, others)
  • South America (Brazil, others)

Direct purchase this market research report now @ https://crediblemarkets.com/reports/purchase/lending-and-loan-origination-systems-market-81113?license_type=single_user;utm_source=Akshay&utm_medium=SatPR

Some points from the table of contents

Chapter 1 Global Loan and Loan Origination Systems Market – Research Scope

Chapter 2 Global Lending and Loan Origination Systems Market – Research Methodology

chapter 3 Global market forces for loan origination and loan origination systems

Chapter 4 Global Lending and Loan Origination Systems Market – By Geography

Chapter 5 Global Lending and Loan Origination Systems Market – By Business Statistics

Chapter 6 Global Lending and Loan Origination Systems Market – By Type

Chapter 7 Global Lending and Loan Origination Systems Market – By Application

Chapter 8 North America Lending and Originating Systems Market

Chapter 9 Analysis of the loan origination and loan origination systems market in Europe

Chapter 10 Asia-Pacific Lending and Originating Systems Market Analysis

Chapter 11 Analysis of Middle East & Africa Lending and Originating Systems Market

Chapter 12 South America Lending and Origination Systems Market Analysis

Chapter 13 Company Profiles

Chapter 14 Market forecasts – by regions

Chapter 15 Market Forecast – By Type and Applications

Here are some of the silent features of the report:

  • In-depth analysis of the potential and risks of the global market.
  • Current research and major events in the Loan and Loan origination systems market.
  • In-depth review of market expansion plans for major industry players.
  • Crucial research into the development trajectory of the lending and loan origination systems market in the years to come.
  • In-depth knowledge of the industry with specific drivers, limitations and global micro-markets.
  • The positive sentiment of current technology and industry dynamics is influencing the loan origination and loan origination systems market.

Contact us:

Credible markets
99 Wall Street 2124 New York, NY 10005
E-mail- [email protected]

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Commercial Lenders – Lexology https://atriunfar.net/commercial-lenders-lexology/ https://atriunfar.net/commercial-lenders-lexology/#respond Thu, 19 Aug 2021 07:44:18 +0000 https://atriunfar.net/?p=645 Commercial Lenders – LexologyThis article is an extract from The Project Finance Law Review – Edition 3. Click here for the full guide. I Commercial lending in project financings i Introduction Commercial lending has formed the bedrock of financing sources for large-scale project financings ever since their emergence, with the product being refined in financings for the UK North […]]]> Commercial Lenders – Lexology

This article is an extract from The Project Finance Law Review – Edition 3. Click here for the full guide.

I Commercial lending in project financings

i Introduction

Commercial lending has formed the bedrock of financing sources for large-scale project financings ever since their emergence, with the product being refined in financings for the UK North Sea oil field in the 1970s onwards, and becoming increasingly internationalised during the 1990s and beyond.

While the commercial lenders’ share of the market has reduced over time, largely driven by changes in the appetite of commercial banks to provide long-term financing, commercial lenders continue to be the primary funding source for project financings. The IJ Global Infrastructure and Project Finance League Table Report for 2020 reports commercial lending of US$ 221.42 billion to project finance transactions, which comprises over half of the total value of funds sourced from commercial lenders, export credit agencies (ECAs), development banks, bonds and equity. This was even higher than the amount of commercial lending provided in 2019, demonstrating that the commercial lending market (as well as the project financing market as a whole) has continued to lend in spite of the uncertainties that covid-19 brought to the global economy during much of 2020.

The key source of commercial lending has been and continues to be commercial banks, although in recent years and in some markets there has been an increase in non-bank loans by pension funds, insurance companies and investment funds, which had previously tended to be involved in project financings through project bonds and other products.

Very broadly, the commercial bank market is comprised of international and local banks. This is not necessarily an easy distinction, but the typical hallmark of an international commercial bank is that it performs the majority of its lending outside its home jurisdiction, whereas local banks (also called domestic banks) would do the majority of their business in their home jurisdiction, have a full domestic banking licence and be able to lend in local currency. International commercial banks (such as leading European and Japanese commercial banks) are prominent in most regions globally. By contrast, local commercial banks feature more prominently in their respective countries of origin or region (for example various South African banks are particularly active in sub-Saharan Africa and Saudi Arabian commercial banks in the Middle East).

On a global scale, the commercial lending market for project financings is dominated by the large European, Japanese and Chinese commercial banks, comprising together 16 of the top 20 commercial direct lender loans (with three Japanese commercial banks occupying three of the top four spots). However, this varies between regions and between countries within the same region. For example, according to the IJ Global Infrastructure and Project Finance League Table Report for 2020, 19 of the top 20 commercial lenders in Europe are European and Japanese commercial banks. In contrast, in the US, US banks feature more prominently (although two Japanese commercial banks occupy the top two spots). In Asia-Pacific as a whole, three Japanese commercial banks hold the top three spots, although in specific markets this varies, and so for example in China, Chinese banks dominate. In Latin America, aside from the European banks (three of whom are Spanish) and Japanese commercial banks, commercial banks from Latin America and North America (three from each) are more active. Similarly, in the MENA region, eight of the top 20 are from the Middle East (five of which are from Saudi Arabia), while in sub-Saharan Africa, there is a range of banks from South Africa adding to the mix of international commercial banks.

ii Holding versus originating loans

During much of the past century, commercial banks would anticipate remaining the lender of record for the full term of a financing, which in the case of project financings could be well over a decade, possibly two decades. This expectation was reflected on the project company and sponsor side, with large corporates expecting its banks to stay involved in the relationship long-term. This model can be described as an ‘originate-hold’ approach, and was typical for bilateral loans between the borrower and one commercial bank (often a domestic commercial bank), and when one commercial bank could not hold the full amount of debt on its balance sheet a number of commercial banks formed ‘clubs’ in order to meet the funding requirements of larger projects.

At the beginning of the century a shift to an ‘originate-to-distribute’ model occurred, in which certain international commercial banks would use their experience to structure bankable projects, finance them and then sell down their participation (to the extent they were involved in primary syndication) in the secondary market. In this model, the commercial banks with specialised teams could take on more of a structuring role, bring projects to other financial institutions (that did not have the expertise, resources or desire to conduct the complex risk analysis required at the origination stage), and free up capital to be involved in future projects.

After the 2008 global financial crisis, some commercial lenders became reluctant to be involved in transactions where the structuring banks were not, or did not intend to be, lending a meaningful amount of the debt ensuring aligned interests and risk. Commercial banks that were able to lend in a meaningful way used this ability to leverage more of the roles and accompanying fees, leading for example to Japanese banks taking on many more of the multiple roles discussed in Section I.iii. Commercial lenders also discovered that as markets move they cannot necessarily rely on there being a willing buyer of project debt.

Current market practice is that even bilateral project finance loans are typically drafted such that multiple lenders are possible in the future, often with a relatively consent-free right for lenders to transfer. Given this, project companies and sponsors must ensure that documentation appropriately protects their positions, as they no longer have the comfort that they can rely on their relationships with specific lenders to resolve issues that arise in the future.

iii Impact of global financial crisis

The global financial crisis had a significant impact on commercial bank loan liquidity post-2008, as commercial banks sought to reduce their risk exposure to long-term debt by selling down their existing liabilities and refraining from financing new projects. The introduction of new regulatory requirements, such as Basel III, following the global financial crisis resulted in more stringent capital reserve requirements for banks, which further reduced commercial bank loan liquidity (in the primary and secondary market) and increased the cost of funding. In particular, the additional requirements imposed by Basel III attribute a higher risk weighting to long-term debt such that financing longer-term projects became more costly. These events culminated in the commercial banks (particularly banks from the US and Europe) finding it much more difficult to provide longer-tenor debt; tenors exceeding 10–15 years are now challenging for commercial banks and are often only to be seen for the ‘big ticket’ multi-sourced projects. There is also a divide of banks on a regional basis, with US banks having a ‘maximum’ tenor typically in the region of seven to 10 years, whereas certain Asian commercial banks (Japanese and Chinese ones) have been able to provide loans for appropriate projects with 15–18 year tenors.

iv Multi-sourced project financings

While ECAs and development banks have been active for decades, the lack of commercial bank loan liquidity for longer tenors has forced sponsors to finance projects using multiple sources.

At the same time, the availability of commercial debt for a project financing increases where that ECAs and development banks are involved. This is due to several reasons, including that ‘covered lenders’ lending with an ECA insurance policy can reduce or eliminate their exposure to political and commercial risks, the involvement of ECAs and development banks give comfort to commercial banks that environmental, social and governance (ESG) considerations will have been fully vetted and will mitigate their risk of reputational damage, and the perception that local governments will be less likely to interfere with projects that involve ECAs and development banks.

In these multi-sourced financings, the number of commercial banks involved may be comparatively higher than in prior years due to their restraints on liquidity, and the make-up of the commercial lender group has changed, with Japanese and Chinese commercial banks and, in certain regions, local or regional banks taking on more and larger participations.

II Features of commercial banks in project financings

i Expertise

Commercial banks that have extensive involvement in project finance transactions are able to analyse, due diligence and understand how the various project risks are being allocated and how to ensure that a particular project is ‘bankable’. The leading international commercial banks in particular tend to have large teams, focused on different sectors and regions, allowing them to be involved in a diverse range of projects globally. This puts them in a unique position of building up a wealth of knowledge and experience that they can utilise for future projects. In some cases, commercial banks may employ their own industry experts in order to heighten their expertise in particular sectors.

The commercial banks’ project finance experience can be contrasted with certain other funding sources that may either not be set up to have specialist experience or may be in the process of growing their expertise. In multi-sourced project financings, other funding sources will take added comfort from the knowledge that the project risks have been thoroughly due diligenced and regarded as bankable by experienced international commercial banks. This ability to analyse the complex risk allocation also enables them to be able to provide financing during the construction period. This can be contrasted with other sources of funding, such as in the capital markets, where institutional investors prefer lower, or at least consistent, risk investments and have concerns in funding during the construction period when no project revenues are flowing.

ii Multiple roles

As an extension of their corporate relationship banking approach, advisory and other services (e.g., running project accounts) have always been provided by commercial banks in project financings. However, as project financings have increasingly involved more lenders, there has been a disaggregation of the roles and charging of appropriate fees for each role (which allows the margin on the loans to reflect borrowing costs only).

These roles on the ‘lender-side’ could include, during structuring and initial syndication, roles such as structuring banks, documentation banks and coordinators or arrangers. The terms used can vary, but the role is generally to manage the overall financing process and act as coordinators between the lenders and also between the lender group and sponsor group. During the term of the financing, other mechanical and administrative roles will be important including facility agent, security agent and account bank; in each case there may be multiple, reflecting different facilities, and security and accounts onshore and offshore. More complex project financings may have roles such as insurance bank (along with separate insurance advisors to the borrower and lenders), technical bank (along with separate technical consultant to the lenders), modelling bank, and so on to streamline the due diligence process. Documentation will tend to include provisions such that these roles can change over the life of the financing.

One critical role that has developed as the complexity of project financings has increased is the role of financial adviser to the sponsors or borrower (i.e., ‘borrower-side’). In this role, they can utilise their knowledge and experience to advise the sponsors as to how to structure an internationally bankable project, and what the best sources of financing are for the project, which could include any or all of ECAs, development banks, bonds and commercial bank lenders, among other sources. While there may be an implicit understanding that a financial adviser that is a bank will also be lending some amount (the lending team would be screened from the financial adviser side), there are active independent financial advisers in various markets (e.g., the Middle East power market) that do not lend on the projects on which they advise. The more sources of financing under consideration, the more important this role can be, and the potential involvement of ECAs would mean that consideration should be given to procurement processes also by the financial adviser.

Additionally, commercial banks may (1) provide bridge financing loans (until the full project financing becomes available) on a corporate financing basis, often based on key relationships between the commercial banks and the main sponsors developing the project; (2) provide working capital facilities during the term of the financing to assist the borrower in managing its day to day cash flows (which may or may not be secured at the same level as the project financing); (3) act as providers of any necessary credit support, such as letters of credit; and (4) perform the key role of hedging banks where necessary (discussed further in Section II.iv).

As a final note, international commercial banks tend to be well placed to perform advisory and service roles in project financings, whereas various sources of financing such as bond investors, ECAs and development banks tend to not perform these roles (at least in multi-sourced financings), and lenders of ‘alternative financing’ such as insurance companies also tend to prefer to be ‘passive’ lenders in project financings.

iii Flexibility

Commercial banks that are able to participate in the more complex project financings, particularly in roles such as a coordinator, tend to be able to offer considerable flexibility to the borrower and sponsors. This is partly as their interest is, at least traditionally, purely commercial and ensuring that the overall transaction is ‘profitable’. This differs to some other financiers, such as government-owned ECAs or development banks, whose involvement may be subject to policy-based eligibility criteria, such as promotion of a country’s exports, support for a particular industry (e.g., renewable projects) or other considerations. As such, while commercial banks may have their own internal policies and business strategies that will inevitably influence their product offerings and decision making, ultimately if it makes commercial sense, then they can exercise a greater degree of latitude in considering whether or not to be involved in any given project (having said that, patterns have begun to emerge where internal policies of, and external pressures on, commercial banks are having a greater level of influence on their decision making than in the past, as discussed in further detail in Section III). For example, while it may be common to see Japanese commercial banks financing projects involving major Japanese trading houses, the existence of a Japanese trading company in the project is not in itself a mandatory requirement (whereas the involvement of JBIC or NEXI as the Japanese ECAs would necessitate some Japanese content or benefit to Japan for a project to be supported).

This flexibility manifests itself in many ways which may be of varying value on different projects, such as:

  1. funding flexibility, whereby commercial lenders are more likely to be able to allow drawdowns over the construction period that align with payment milestones (as compared, for example, to bonds that tend to be single drawdown or limited flexibility);
  2. repayment flexibility, whereby commercial lenders may be able to offer amortisation profiles that are tailored to the specifics of a particular project, which can be more challenging for other financings sources such as bonds and ECAs (many of which are limited by the OECD Arrangement restrictions in this regard);
  3. currency flexibility, whereby commercial lenders may be able to offer local currencies as part of the financing package if construction and ongoing costs may be in local currency, and also provide for a natural hedge where all or a portion of revenue will be denominated in local currency; and
  4. consent/waiver flexibility, whereby commercial lenders tend to be able to manage consent or waiver requests that may arise in a project’s day-to-day running (as compared to consent processes with bondholders being more difficult to manage, and institutions such as ECAs and development banks often having more formal processes that may make the process more lengthy).

iv Interest rates, tenor and hedging

Commercial banks typically provide floating rate facilities linked to an interbank offer rate (IBOR), such as LIBOR (or its successor SONIA), given how they in turn fund themselves, whereas some other financing sources (e.g., ECAs, project bonds) can provide fixed-rate loans. Hedging can, and often is, used to remove or mitigate the risk of interest rate fluctuations from the project company, and lenders often require this. This hedging is often also provided by commercial banks, but while lenders and hedging banks together form part of the overall financing structure, their interests are not entirely aligned, and so intercreditor arrangements must be carefully managed (hedging banks will almost always be a secured party and will share in any proceeds on enforcement, but hedging banks tend not to have much control over day-to-day decision-making). During 2020, hedging has become a considerable discussion point on many project financings as the ongoing transition away from LIBOR has raised questions as to how to ensure that the replacement screen rate used under both the loan documentation and the hedging documentation is sufficiently consistent. In practice, having the same commercial banks taking on roles as both lender and hedging bank is generally perceived to be advantageous, as a commercial bank is likely to take a more holistic approach if involved in both (even if these are separate desks and risks internally), and controls on avoiding ‘orphan swaps’ in cases of transfers of debt post-closing are often put in place.

As mentioned earlier, one critical challenge in the context of commercial banks on project financings relates to their ability to offer long tenors, with the market finding ways to manage this through increased use of multi-sourced financings as described above, or through the use of mini-perms as discussed in Section III.

v Representations, covenants and events of default package

The package of representations, covenants and events of default that are contained in the finance documentation are very important to the commercial banks, and will be reviewed in detail to ensure the commercial banks (1) receive the appropriate level of information in order to monitor the progress and performance of the project; (2) have the appropriate level of control to consider issues as and when they arise; and (3) appropriate protections and remedies in the event that the project goes into default. However, given that multi-sourced financings are now becoming the norm, the requirements of the commercial banks in relation to this package are very much aligned with the requirements of other funding sources, such as ECAs and development banks. While the package tends to more restrictive than the package applying to a project bond, commercial lenders tend to be able to react more quickly to amendment and waiver requests.

vi Host country risk

While commercial banks are keen to support the activities of their key customers wherever these may be carried out, the location of a project can have a significant impact on how the commercial banks view the overall risk profile of that project. Ideally, the political and regulatory landscape would be stable, established and reliable because the commercial banks are looking to the long-term success of the project, and so sudden changes in political policies or regulations can have a materially detrimental impact on the viability or economics of a project. Although this can never be guaranteed, there a certain regions and jurisdictions that will be viewed as in the higher risk category insofar as these matters are concerned (such as sub-Saharan Africa, South East Asia and Latin America).

The ability for commercial banks to participate in projects located in these regions will often be enhanced (if not contingent) upon the substantial involvement of one or more ECAs or development banks as part of the financing. The commercial banks will take a significant degree of comfort in their involvement, as these institutions have direct lines of communication into senior representatives of the host country’s government, which can be crucial when seeking to address specific political or regulatory concerns that may impact the project.

It is notable that in regions such as Latin America and sub-Saharan Africa, ECA and DFI funding features more prominently as a funding source and commercial lending represents a smaller percentage of the overall sources of project financing in these regions than it does in Europe, North America, the Middle East (especially the GCC) and Asia-Pacific.

III Notable trends

i Energy transition

ESG considerations have been important to commercial banks throughout this century, with the Equator Principles (a risk management framework for determining, assessing and managing environmental and social risks in project finance) being adopted early in the century by many of the most active project finance commercial banks. Nevertheless, the last couple of years and 2020 in particular has seen a huge increase in the stakeholder pressure (shareholder, government and public) on commercial banks to consider ‘non-commercial’ factors in their lending business, for example to prioritise energy transition and sustainability projects above potentially more profitable financings in less green or sustainable sectors. This pressure to reshape the economy through financings was first felt by development banks as non-commercial policy lenders, then more recently by ECAs, and now commercial banks. This pressure is most critically felt by European and US commercial banks, whereas many local commercial banks in developing countries continue to support bankable projects across all sectors in a more ‘neutral’ way. The pressure is now spreading globally, with the majority of new banks that have adopted the Equator Principles in the last couple of years being from Asia. There is some mismatch between the domestic pressure that an international commercial bank may face (e.g., for a European bank to not finance oil and gas projects), and what is relatively green in the markets it operates in – for example, gas being a clean alternative to coal in China and India, LNG being critical to Japan’s energy security policy, and lack of power being a more critical issue for much of sub-Saharan Africa than source of power.

ii Emergence of non-bank commercial lenders

The commercial lending market is overwhelmingly made up of banks. However in recent years there has been an increase in non-bank loans by institutional investors, such as insurance companies, pension funds and investment funds, sometimes referred to as ‘alternative finance’. These types of financiers traditionally prefer government bonds or property as relatively low risk and with predictable returns; however, interest in project financings has increased as return on their traditional products have declined and returns on project financings have increased reflecting liquidity issues in the commercial bank market. By way of example, AXA Group (through its investment arm, AXA Investment Managers) has been active in the infrastructure sector since 2013, when it was provided with €10 billion to invest in infrastructure and Allianz Global Investors established an infrastructure debt platform in 2012.

At this stage, this type of alternative finance has focused on sectors regarded as lower risk and which are in line with their sustainable development policies, such as the social infrastructure and transport sectors in developed markets. These sectors are generally regarded as well developed and stable, and to the extent the projects are structured with long-term revenues linked to inflation (often on an availability basis rather than market risk) then it is an attractive proposition for insurers. Many of the challenges that institutional investors have in project bonds such as construction risk, as described elsewhere in this work in relation to project bonds, remain for loans by institutional investors.

iii Mini-perm structures

In the US and GCC in particular, the challenge of commercial banks being unable to provide long tenors is being addressed in some projects by way of ‘mini-perms’. A mini-perm is a relatively short-term loan that relies on a project being refinanced, typically within three to four years after construction, once the project has demonstrated stable operations and the period of highest risk has passed. At this point, the borrower should be able to refinance on more competitive terms, and may be able to attract a broader range of financial providers that have lower risk appetites (such as institutional investors by way of a project bond). Mini-perms can be ‘hard’ in that they require the project company to refinance the loans by a certain date and failure to do so leading to an event of default, or ‘soft’ in that after a certain period of time ‘punitive’ mechanics will increase financing costs, provide for cash-sweeps and stop dividends, or other similar measures, thus incentivising a refinancing. These structures are, however, only bankable in regions where there is a higher degree of confidence in the ability to refinance, such as the US (given its deep liquidity pools) and the United Arab Emirates and other GCC countries (given the track record of successful project financings and refinancings).

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Lenders’ Relationships with Project Counterparties https://atriunfar.net/lenders-relationships-with-project-counterparties/ https://atriunfar.net/lenders-relationships-with-project-counterparties/#respond Thu, 19 Aug 2021 07:43:41 +0000 https://atriunfar.net/?p=648 Lenders’ Relationships with Project CounterpartiesThis article is an extract from The Project Finance Law Review – Edition 3. Click here for the full guide. I Introduction to project agreements Central to any project financing are the project agreements or project documents – the contractual arrangements the borrower enters into for the development, construction, operation and maintenance of the underlying project. […]]]> Lenders’ Relationships with Project Counterparties

This article is an extract from The Project Finance Law Review – Edition 3. Click here for the full guide.

I Introduction to project agreements

Central to any project financing are the project agreements or project documents – the contractual arrangements the borrower enters into for the development, construction, operation and maintenance of the underlying project. Depending on the status and type of project, project agreements may include construction contracts, supply agreements, operation and maintenance agreements and offtake agreements, among others. It is imperative for lenders to understand, evaluate and preserve the project agreements because: (1) they are the primary components of the project’s value; (2) they form the basis for credit extensions under the credit facility (whether during construction in the form of construction loans and letters of credit to support the borrower’s performance obligations under the project agreements or during operation in the form of working capital loans and letters of credit for similar support); and (3) direct lender loans receive a security interest in them as part of the non-recourse financing structure.

Unlike other secured lending transactions, the primary value in a project financing is the revenue streams from the project. With limited value stemming from the physical assets, a lender maintaining the project as a going concern means maintaining the contractual rights and relationships that allow the project to be built and to operate, both during the term of the facility and in the event of foreclosure. Because of the nature of project financings, the obligations of the borrower under the project agreements create the basis for certain credit facilities and extensions. For example, under many project agreements, because the borrower is not an otherwise creditworthy entity, the borrower may be required to provide performance security to its counterparties. In lieu of providing cash security, the borrower will enter a letter of credit facility with lenders who will issue letters of credit to the project counterparties as beneficiaries of those letters of credit. For projects under construction, the construction contracts will contain key milestones and conditions to payments and, by extension, draws under the credit facility. Consequently, it is important for lenders to understand the terms of such project agreements and protect themselves against risk from non-consensual amendments or modifications, including through change orders during construction.

The nature of non-recourse financing results in heightened importance of timely construction of the project (on budget and in accordance with the performance parameters established in the underlying construction contract) and the project’s continued operation throughout its expected life so that the project’s revenues are actualized. Therefore, prudent lenders will require the grant of a security interest in all project agreements of the borrower as part of the collateral package so that, in the event of a default, direct lender loans (through their agent or another designee) are able to take assignment of project agreements and step into the shoes of the borrower thereunder. This has two implications for lenders in practice. First, lenders must understand whether the project agreements permit this assignment. Second, and most importantly in the case of material agreements, they must seek contractual privity with counterparties and receive the prior consent of those counterparties to step in and cure defaults prior to exercising the last-ditch option to foreclose.

For lenders, evaluating and preserving the project agreement structure and mitigating possible risks associated therewith is addressed through due diligence, how the finance documents with the borrower are drafted and, in many cases, with direct agreements with the applicable project counterparties. These are not mutually exclusive options and lenders do, and should, use them in combination with each other.

II Understanding and evaluating the project structure through due diligence

The first step in any project financing is due diligence of the borrower and the project. This includes understanding and evaluating the project agreements and project counterparties. Due diligence, even with respect to project agreements, is a multifaceted process. Through consultants, counsel and internal experts, lenders should evaluate the major risks they would assume, including market risk, construction risk, operational risk and contractual risk, among others. In each facet of diligence, the analysis will inevitably turn to the risks intrinsic in project agreements from non-performance of both the borrower and the counterparty. In transactions where project agreements form part or all of the basis of the credit facility, such as facilities under which letters of credit will be issued or where payment obligations under construction contracts require draws by the borrower, lenders should evaluate the circumstances, timing and likelihood of draws on the applicable loans or letters of credit to better understand and assess the risks of the project.

In addition to providing lenders an overall picture of project agreements applicable to the project, diligence also, importantly, allows lenders to determine which project agreements are material. A contract’s impact on the construction of the project, the projected performance of the project, the revenue stream of the project once operational (i.e., the financial impact of a termination or other impairment of the applicable project agreement) and the replaceability of the contract (i.e., in the case of a supply or an offtake agreement, the presence of a robust spot or merchant market, or more generally, the willingness of other creditworthy counterparties to enter into replacement contracts on similar terms) are typical ways for lenders to evaluate materiality. Essentially, if the borrower’s contractual rights under a particular project agreement are necessary for the timely and cost-effective construction of the project, the operation of the project in accordance with applicable law or the maintenance of the revenue stream of the project, and the project agreement cannot quickly and readily be replaced with a comparable contract, that project agreement is a material contract. In practice, material contracts are likely to include key construction contracts, offtake agreements, interconnection agreements (if applicable), operations and maintenance agreements and services agreements. The designation of a contract as material allows lenders to identify which project agreements require specific conditions, covenants and events of default under the financing documents or be subject to a direct agreement with the lenders (or their agent) to adequately address risk.

While there are basic elements of diligence applicable to every project, during the diligence phase the rights of lenders and the process of information gathering and utilisation is heavily dependent on the status of the project (i.e., whether it is yet to be constructed or is in operation).

The legal due diligence phase for the project financing of a construction project often consists of reviewing advanced drafts of, rather than executed and effective, project agreements. With the agreements still subject to negotiation between the borrower and its counterparties, lenders can flag risks in the draft agreements and work with the borrower to mitigate those risks through changes before execution. Those changes may include, for example, modifying counterparty termination rights, increasing counterparty performance security obligations or agreeing to a form of direct agreement. In the event that those changes are not accepted, or the applicable project agreement has already been executed, the lenders may still address such points through the terms of the loan agreement, namely the covenant package, and the direct agreement with the counterparties (in which modifications to the applicable contract can sometimes be agreed, rather than through an independent amendment). In financings for operating projects (or projects nearing operation) where the project agreements typically are fully negotiated and executed, there is limited ability for lenders to request changes to any particular project agreement (though, in the case of a fatal flaw, lenders may still require modifications to a contract). Therefore, the covenant package and the direct agreement become the primary tool of lenders to mitigate risk.

Due diligence, whether on a to-be-developed or an already developed project, allows lenders to identify and evaluate the project agreements and their potential risks. With this knowledge, due diligence shapes the terms of the financing documents, including provisions in the credit agreement such as the representations, conditions precedent, covenants and events of default, as well as the terms of the direct agreements and from whom these direct agreements shall be required. This due diligence may also result in requirements for sponsor credit support to address certain risks in the project agreements that cannot be addressed through these provisions and direct agreements.

III Preserving the project agreement structure through credit agreement provisions

The broad understanding of the project agreements achieved through diligence, including identification of material project agreements and risks, primarily impacts four key sets of provisions of a credit agreement in any project financing: the representations and warranties, the conditions precedent, the covenants and the events of default.

i Representations and warranties

Representations and warranties provide lenders with factual statements about the project agreements and the performance of the borrower and counterparty thereunder. Typical representations and warranties with respect to project agreements include a list of all agreements to which the borrower is a party, a statement that all project agreements are in full force and effect and there are no other project agreements than those that have been provided to the lenders, a representation that, to the borrower’s knowledge, the counterparties’ representations and warranties in the underlying project agreements are true and correct, a representation that all information provided by the borrower to the lenders’ third-party consultants is true and accurate in all material respects, and that there is no default or other adverse events (such as force majeure) under the project agreements. Lenders will also seek a representation from the borrower that the financing will not contravene or result in a lien under the project agreements.

While the inclusion of representations and warranties covering the above matters is standard, there are still significant points of negotiation between lenders and the borrower. From a lender’s perspective, it would be ideal for all representations to be ‘clean’ – that is, the representations would not be subject to any qualifications. Borrowers, understandably, resist giving representations without qualification, particularly when the representations speak to the actions or statuses of other parties. In practice, the solution for representations relating to project counterparties or project agreement outside the borrower’s control is often for the parties to agree to limit these representations to the extent of the borrower’s knowledge (though, to what extent is still heavily negotiated). However, where borrowers are in control (for example, with a statement that the borrower is not in default under a given project agreement), lenders should resist any attempt to include a knowledge qualifier.

In addition to knowledge qualifiers, borrowers will negotiate thresholds for representations requiring the listing of project agreements and may also seek to limit non-contravention and no lien representations to only the agreed material project agreements. Finally, borrowers often seek to subject their representations to a materiality qualifier. This qualifier can take the form of general materiality (e.g., that there are no material breaches under the project agreements) or material adverse effect (MAE) (sometimes called material adverse change). While MAE is often a heavily negotiated concept, at its most basic level it means that the representation is true and correct except for non-disclosed items that do not have a significant impact on the operations of the project or borrower. As such, MAE is a much higher standard than general materiality and lenders are resistant to its liberal use in representations, particularly with respect to important project agreements.

Representations and warranties for project agreements serve several purposes. First, they act as a confirmation of diligence. The list of project agreements proposed by the borrower (typically attached as a schedule to the credit agreement) should confirm the lenders’ understanding of the suite of contractual arrangements for the project and, in instances where there are discrepancies, allow lenders to conduct diligence on any newly disclosed contracts prior to execution of the financing documents. Second, accuracy in all material respects of representations and warranties is typically a condition to the effectiveness of the credit agreement and to each extension of credit thereunder. Finally, as discussed more below, a breach of a representation (occasionally subject to a cure period) in any material respect is universally an event of default under a credit agreement.

ii Conditions precedent

The conditions precedent to a credit agreement provide another opportunity for lenders to address risks associated with project agreements. Conditions precedent are actions or events that must occur prior to the effectiveness of a lender’s (or other creditor’s) obligations to extend credit under the applicable debt documents. There are several customary conditions precedent in respect of project agreements that the parties will typically expect to include in the credit agreement. These conditions include, among others: the execution and delivery of direct agreements with specified counterparties and delivery of any legal opinions required thereunder, receipt by lenders of all validly authorised and executed project agreements (which such project agreements must be in a form satisfactory to lenders), a requirement that the project agreements are in full force and effect without any undisclosed amendments, and compliance with and no default under the project agreements by the borrower and the counterparties thereto. Additionally, as mentioned, lenders will expect the borrower to certify that all representations and warranties (including those related to the project agreements and counterparties) are true and correct in all material respects.

Fundamentally, the purpose of these customary conditions precedent is to provide lenders’ comfort and satisfaction with the form and status of the project agreements, and with the borrower’s and its counterparties’ performance thereunder. Further, lenders seek to ensure that all documentation with respect to the relationship between lenders and project counterparties is in full force and effect and has been provided to the lenders – in other words, the lenders want certainty that all important project agreements were provided to them during the diligence process and that the lenders have any required rights (through a direct agreement) under material project agreements. In each case, lenders want to establish a satisfactory system prior to incurring exposure to the borrower.

Conditions precedent also provide lenders the opportunity to assess risks unique to each project that may not be addressed by the customary conditions precedent found in most credit agreements (e.g., delivery of certain amendments of or additional credit support by the counterparty under a project agreement). Conditions precedent will be developed over the course of due diligence, allowing lenders to address unacceptable risks specific to the project or its project agreement prior to the effectiveness of any project financing.

iii Covenants

While representations and warranties provide statements of fact allowing lenders to assess the project agreements and evaluate the risks they are willing to take, and conditions precedent protect lenders from risks they have not had the opportunity to assess prior to funding, the covenant package provides forward-looking protection, to preserve project agreements arrangement during the term of the financing. Project agreements are addressed in both the affirmative covenants and negative covenants found in any project finance credit agreement.

Affirmative covenants

Affirmative covenants allow lenders to require the borrower to take specific actions with respect to the project agreements. A common subcategory of affirmative covenants is information covenants requiring the borrower to deliver to lenders certain notices or other correspondence received or delivered by the borrower in respect of the project agreements. Such notices include: (1) notices of default or breach under the project agreements; (2) notices of force majeure or other material events (such as casualty or condemnation events); and (3) notices of any action or threat of action against a material project counterparty. In some cases, especially in transactions involving new technology or where greater oversight is needed, lenders may also require borrowers to provide lenders with copies of all correspondence outside the ordinary course of business under the project agreements. In all cases, these information covenants allow lenders to remain promptly informed of any material developments at the project.

In addition to information covenants, the affirmative covenants commonly include a requirement that the borrower comply with its obligations under the project agreements. Further, if the borrower enters into any additional or replacement project agreements, the borrower will be required to take all such actions necessary to ensure that such agreements become subject to the lenders’ security interest.

Finally, the affirmative covenants may also include covenants specific to the project’s status and nature of the financing. For example, if a key project agreement expires prior to the maturity of the debt facility, lenders may require the borrower to exercise any extension options under the agreement or otherwise enter into a replacement agreement with terms and a counterparty acceptable to the lenders.

Negative covenants

The most important covenants with respect to project agreements are the negative covenants. Generally speaking, these negative covenants prevent the borrower from taking, without lender consent, certain actions that would otherwise disrupt or materially alter the basis upon which the lenders lent to the project. Central to this protection is the covenant against termination of, or material amendment to, the project agreements. This covenant restricts (subject to exceptions and materiality qualifiers) the borrower from terminating, amending or modifying a project agreement and also typically restricts the borrower’s ability to assign or permit a counterparty to assign its rights under a project agreement. It is common for this covenant to prohibit the borrower from granting any consent or waiver in respect of a material obligation under a project agreement. For a project under construction, this covenant will generally also prevent material change orders under any construction agreement, making changes to the construction schedule or cost (which function like amendments to the main construction contract) subject to lender approval. This covenant is generally subject to three qualifiers.

First, it will only apply to those project agreements that were agreed as material. Second, borrowers often negotiate replacement rights. These replacement rights usually permit some time period during which the borrower, without breaching the covenant, can enter into an acceptable replacement contract (with an acceptable counterparty) if the original contract is terminated early. The lenders and the borrower may even pre-agree to a form of acceptable replacement contract that is attached to the credit agreement, or that must contain certain terms that are addressed in a schedule to the credit agreement. The replacement rights can be conditioned on the borrower executing a replacement agreement with a specified counterparty, a counterparty with specified levels of technical expertise and creditworthiness, or one that is otherwise acceptable to lenders. Third, the covenant generally prohibits only actions that would have a materially adverse effect on the borrower, with the extent and nature of that materiality qualifier often varying according to the overall importance of the underlying project agreement.

As indicated above, the qualifiers and the covenant generally do not apply equally to all material project agreements. For instance, the borrower may not be permitted to replace particularly important project agreements while retaining replacement rights with respect to other, less important project agreements. The lender consent threshold for such agreements may be a super majority, instead of a simple majority consent, or the material adverse effect qualifier would not apply (such that lenders get a say over any amendment to or waiver under such contract, however important).

There are two additional negative covenants generally applicable to project agreements in a project financing. First, a prohibition on settling or compromising any material claim against a project party. This covenant is generally qualified by materiality, in that the project party has to be a material project party (e.g., construction contractor, offtaker or material service provider). Second, a covenant that prohibits the borrower from entering into any new project agreements involving new project expenditures. As with the other negative covenants, this covenant is also commonly subject to certain exceptions. In this case, the borrower will negotiate agreed individual and aggregate thresholds for contract expenditures before the covenant is applicable or, if such expenditures exceed those thresholds, a material adverse effect qualifier. The parties can also negotiate the term for any new contract under which these expenditures are incurred that must elapse before the covenant is triggered – for example, the parties may decide that new expenditures governed by a contract with a term of less than a year are sufficiently immaterial to avoid running afoul of the covenant.

As with the other credit agreement provisions, the lenders may also require additional negative covenants based on project-specific material issues (e.g., a prohibition on the borrower materially amending credit support received from counterparties).

iv Events of default

The last section in a credit agreement that involves the project agreements is the event of default provisions. There are several standard events of default that implicate the project agreements or project counterparties.

First, there is a breach by the borrower of a representation: this event of default is most commonly subject to a materiality qualifier (i.e., the applicable representation is breached in any material respect) and in some cases a cure period.

Second, there is a breach by the borrower of a covenant in the credit agreement. Depending on the covenant, the borrower may be granted a period to cure the breach – though as matter of practice, because they are entirely within the control of the borrower, negative covenants are not subject to cure periods. In the case of affirmative covenants applicable to the project agreements, the borrower is almost always granted a cure right.

Third, there is a default by the borrower or a specified project agreement counterparty under a project agreement or direct agreement, or the failure of any such project agreement or direct agreement to be, or stay, in full force and effect. In this case, the event of default is typically limited to material project counterparties. Further, the borrower often has a cure right for defaults or breaches of material project agreements by the applicable counterparties. This cure right, which allows the borrower an agreed period of time to pursue remedies against the defaulting counterparty, may be subject to additional qualifiers such as maintaining a certain financial covenant, funding any shortfalls in reserve accounts or unreimbursed letter of credit drawings and certifying to no other defaults or events of default under the credit agreement.

The final relevant event of default is an insolvency event of a specified project counterparty (e.g., the counterparty voluntarily or involuntarily files for bankruptcy). The counterparties implicated by this standard event of default are often the offtaker, the operator of the project and, in the case of a project under construction, the main construction contractor. However, this list may vary depending on the nature of the contractual arrangements of the project. Unlike the bankruptcy of the borrower, or any pledgors or guarantors (which results in an immediate event of default), typically, there is an agreed period of time after the project counterparty experiences the insolvency event before a default occurs under the credit agreement, and, often, the counterparty’s continuing performance of its obligations under the underlying project agreement during the bankruptcy may prevent the occurrence of the event of default. Further, the borrower is often granted a replacement right to replace the insolvent project counterparty. As with the cure right for project agreement defaults, the borrower often must meet additional qualifiers similarly to those detailed above to benefit from the replacement right.

These events of default, as well as the other credit agreement provisions discussed above, reflect how central the project agreement structure and the prompt performance of the terms by all project counterparties and the borrower are to a financing. As noted above, lenders seek to use the credit agreement to ensure the borrower preserves this structure while simultaneously providing the borrower reasonable flexibility to satisfactorily replace or cure problematic project agreements and counterparties. If the structure or performance of obligations drastically changes, lenders use the credit agreement provisions to prevent further exposure to the borrower.

IV Establishing contractual privity through direct agreements

The final tool available to lenders to preserve the project agreement structure, and to gain contractual privity with a project counterparty, is a direct agreement. The direct agreement, which is often referred to as a ‘Consent’ in US-based project financings, is a financing document between the lenders (acting through the collateral agent, who is appointed to enforce the lenders’ security interest at their direction), borrower and the project counterparty. It is often considered the most important element of any project financing, particularly with respect to the most significant project agreements. As with credit agreement provisions applicable to project agreements, lenders and the borrower will negotiate the universe of counterparties from whom direct agreements will be required. Given the importance of direct agreements in ensuring that project agreements remain in force and the security interest granted in them remains valid, lenders will at the very least require them from the standard material project counterparties.

Put simply, direct agreements are a consent to the collateral assignment of the project agreement. The project counterparty is consenting to the security interest in the borrower’s rights to the project agreement that the borrower has granted to the lenders under a security agreement (or other collateral instrument). Even with respect to project agreements that by their terms expressly permit collateral assignment, lenders will request a direct agreement that includes the express consent to assignment. To that end, they are a collateral document and will benefit from the provisions of the credit agreement as such.

In addition to consenting to the grant of the security interest, the direct agreement also provides the lender with certain rights in respect of the project agreement with regard to the borrower and the project counterparty. A direct agreement will often require the counterparty to concurrently deliver to the lenders copies of notices sent to the borrower. Additionally, a standard direct agreement will grant lenders the right to cure any breach under the project agreement by the borrower. Cure rights are essential in any direct agreement because they ensure that the lenders do not lose the benefit of the underlying project agreement without the opportunity to fix the problems. Such cure rights are often subject to agreed time periods – the lenders will usually have a shorter time to cure defaults arising from the borrower’s failure to make a payment owed under the project agreement than to cure those arising for other reasons. The cure rights in a direct agreement are often heavily negotiated with each project counterparty, with a counterparty typically taking the view that it has already negotiated appropriate cure periods with the borrower. To avoid some of this negotiation, a seasoned and sophisticated borrower will often look to negotiate a form of direct agreement as part of the negotiation of the underlying project agreement. This is the time when a borrower has the most leverage over its counterparty and, assuming it understands the needs of its lenders, can make the negotiation of the direct agreement far smoother.

As with the borrower’s covenants in the credit agreement, in the direct agreement, the counterparty itself will be asked to agree to refrain from terminating, assigning or materially amending the applicable project agreement without lender consent. This provides lenders direct recourse against the counterparty. This provision is often resisted by project counterparties, particularly if a form of direct agreement has not been pre-negotiated. As part of the give and take of the negotiation, lenders will often live without the portion of the provision preventing the counterparty from amending the project agreement, and will rely on its covenants on the borrower in the credit agreement.

Direct agreements also allow lenders to seek the project counterparty’s pre-agreed recognition of lender enforcement rights. Under the step-in rights and substitute owner provisions, lenders (or their agent or other nominees) are granted the right to temporarily or permanently step into, and perform, the borrower’s rights and obligations under the project agreement. The substitute owner provision will also, in the event of a foreclosure by the lenders, permit the applicable purchaser in a resulting foreclosure sale to be recognised as the successor to the borrower and perform under the contract. These provisions are typically highly negotiated since project counterparties seek to mitigate the risk of unqualified substitute owners while lenders seek to preserve a broader market of potential buyers in a foreclosure. In consideration for the recognition of a substitute owner (other than the collateral agent as an interim owner), the project counterparty may seek specific parameters applicable to the proposed substitute owner. For example, the project counterparty may request certain creditworthiness and expertise standards, ensuring that the ultimate substitute owner is reasonably capable of operating the project and meeting the obligations under the project agreement. Additionally, as a condition to recognising a substitute owner or permitting lender step-in rights, the project counterparty will frequently negotiate the direct agreement to require the lenders to cure any existing borrower defaults under the project agreement.

Similarly, if the agreement is terminated as a result of the borrower’s insolvency, the direct agreement’s replacement provision will require the counterparty to enter into a new project agreement with the collateral agent (or a nominee thereof). This provision customarily requires that the replacement agreement be on substantially the same terms as the existing project agreement. The object of this provision and the provisions related to substitute owners is to preserve the value of the project as a going concern in the event of foreclosure.

The direct agreement will also require the project counterparty to deposit any payments under the direct agreement into the secured accounts established pursuant to depositary or accounts agreement for the financing.

Replicating provisions found in the credit agreement, the direct agreement also contains representations and warranties from the applicable project counterparty for the lenders’ benefit as to the counterparty’s status and the status of the project agreements – as discussed above, the borrower can usually only make qualified representations as to the counterparty’s status and performance. Further, the direct agreement will occasionally contain a covenant requiring the counterparty to continue to perform its obligations under the project agreement, although this covenant is often heavily resisted by the counterparty on the basis that it overrides many of the other negotiated provisions of the direct agreement. Finally, lenders may also request that the project counterparty’s counsel deliver a legal opinion as to the enforceability of the direct agreement against the counterparty. This requirement is often a point of contention, as project counterparties resist the incurrence of additional expense (though lenders may accept an in-house counsel’s legal opinion to assuage this concern) and liability attendant with delivering a legal opinion.

While the elements of direct agreements are standard, and direct agreements are often treated as secondary documents in the course of financing negotiations, their importance cannot be overstated. Without a direct agreement, lenders would not have a direct, enforceable contractual relationship with the project counterparties and thus are exposed to the potential significant risk that the project agreement structure would not remain in place following foreclosure or default by the borrower. Direct agreements are often heavily negotiated, and some counterparties, particularly those that are experienced in project finance and knowledgeable as to what has been accepted in other transactions, have great success in pushing back against the standard provisions in a direct agreement. As noted above, to ensure a smooth and efficient execution of a project financing, a borrower is well advised to pre-negotiate the requirements of a direct agreement with its project counterparties.

The above discussion of direct agreements represents the standard project finance lender perspective and requirements. However, there are certain financing structures where lenders either do not have direct contractual privity or do not have an opportunity to negotiate the terms of their direct agreements. For example, in ‘portfolio’ financings, where the borrower is a direct or indirect parent company of several project companies, lenders will not typically have contractual privity with project agreement counterparties. With the lack of contractual privity, lenders may still seek comfort from project agreement counterparties through estoppels. A typical estoppel will contain statements of fact on the status of the project agreement and the parties’ performance thereunder. Further, the estoppel will address any consent rights or other assignment issues that may arise under the project agreement as a result of the parent company financings (i.e., if such financing is deemed to be an assignment under the project agreement) and will typically otherwise contain a short form acknowledgement of the financing.

V Conclusion

With the value of the asset, and therefore the lender’s security package, derived substantially from the successful construction and ongoing operation of the project, project agreements and counterparties – not to mention the borrower’s and lenders’ relationship thereto – are the key elements to any project financing. To fully understand and mitigate the risks of, and to, the project agreement structure, it is imperative that lenders thoroughly carry out due diligence on the project agreements, negotiate key credit agreement provisions (in particular conditions precedent and covenants related thereto) and enter into comprehensive direct agreements. Without this holistic approach, lenders face considerable risk of degradation in asset value during the term of the loan and in the event of any foreclosure or subsequent sale.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

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3 Best Private Student Loans That Don’t Require a Cosigner https://atriunfar.net/3-best-private-student-loans-that-dont-require-a-cosigner/ https://atriunfar.net/3-best-private-student-loans-that-dont-require-a-cosigner/#respond Thu, 19 Aug 2021 07:03:12 +0000 https://atriunfar.net/?p=599 3 Best Private Student Loans That Don’t Require a CosignerOur goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.” You’ll typically need good to excellent credit to qualify […]]]> 3 Best Private Student Loans That Don’t Require a Cosigner

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

You’ll typically need good to excellent credit to qualify for a student loan. If you have poor credit or haven’t yet built a credit history, one way to potentially get approved is by applying with a creditworthy cosigner — this generally means your cosigner must meet the underwriting criteria set by the direct lender loans, which includes having good credit.

If you don’t know someone with good credit who is eligible to cosign your loan, you might be able to qualify on your own with one of the lenders that offer student loans for bad credit.

Here’s what you should know about the best student loans for bad credit without a cosigner and where to find them:

3 best student loans that don’t require a cosigner

To find the right private student loan for your needs, it’s important to research and compare as many lenders as possible. Keep in mind that the best student loans that don’t require a cosigner provide competitive interest rates, a wide selection of loan terms, inclusive eligibility requirements, and responsive customer service.

Here are Credible’s partner lenders that offer private student loans for poor or no credit without a cosigner:

Lender Fixed Rates From (APR) Variable Rates From (APR) Loan amounts Credit score


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.16%+ 1.83%+ $2,001 to $200,000 540
  • Fixed APR:
    3.16%+
  • Variable APR:
    1.83%+
  • Min. credit score:
    540
  • Loan amount:
    $2,001 to $200,000
  • Loan terms (years):
    5, 7, 10, 12, 15, 20
  • Repayment options:
    Full deferral, fixed/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disability
  • Fees:
    None
  • Discounts:
    0.25% to 1.00% automatic payment discount, 1% cash back graduation reward
  • Eligibility:
    Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking program
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes
  • Cosigner release:
    After 24 months
  • Loan servicer:
    Launch Servicing, LLC


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.83%+8 1.56%+8 $1,001 up to 100% of school certified cost of attendance 670
  • Fixed APR:
    3.83%+8
  • Variable APR:
    1.56%+8
  • Min. credit score:
    670
  • Loan amount:
    $1,001 up to cost of attendance
  • Loan terms (years):
    5, 10, 15
  • Repayment options:
    Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearance
  • Fees:
    Late fee
  • Discounts:
    Autopay, reward for on-time graduation
  • Eligibility:
    Must be an Indiana resident or a U.S. citizen attending an eligible Indiana school
  • Customer service:
    Email, phone, chat
  • Soft credit check:
    Yes
  • Cosigner release:
    After 48 months
  • Loan servicer:
    American Education Services


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.75%+ N/A $1,500 up to school’s certified cost of attendance less aid 670
  • Fixed APR:
    3.75%+
  • Variable APR:
    N/A
  • Min. credit score:
    670
  • Loan amount:
    $1,500 up to cost of attendance less aid
  • Loan terms (years):
    10, 15
  • Repayment options:
    Full deferral, interest only, immediate repayment, academic deferral, forbearance
  • Fees:
    None
  • Discounts:
    None
  • Eligibility:
    Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes
  • Cosigner release:
    After 48 months
  • Loan servicer:
    American Education Services (AES)
Compare private student loan rates without affecting
your credit score. 100% free!
Compare Private Loans Now

Ascent

With Ascent, you can borrow $2,001 to $200,000 (depending on if your credit is tested or not) with repayment terms from five to 20 years (depending on the loan type).

Additionally, you could be eligible for a 1% cashback graduation reward from Ascent if you earn your degree within five years.


4.9


Credible rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

Ascent Private Student Loans

Ready to find a student loan?
Compare rates from top private lenders to find the right student loan for you.

Check Personalized Rates

Checking rates won’t affect your credit score

  • Fixed APR: 3.16%+
  • Variable APR: 1.83%+
  • Min. credit score: 540
  • Loan amount: $2,001 to $200,000
  • Loan terms (years): 5, 7, 10, 12, 15, 20
  • Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disability
  • Fees: None
  • Discounts: 0.25% to 1.00% automatic payment discount, 1% cash back graduation reward
  • Eligibility: Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking program
  • Customer service: Email, phone
  • Soft credit check: Yes
  • Cosigner release: After 24 months
  • Loan servicer: Launch Servicing, LLC

INvestEd

If you live or attend school in Indiana, INvestEd might be a good choice for a student loan. You can borrow $1,000 up to 100% of your school’s cost of attendance (minus any other financial aid you’ve received) with terms from five to 15 years.


4.6


Credible rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

INvestEd Private Student Loans

Ready to find a student loan?
Compare rates from top private lenders to find the right student loan for you.

Check Personalized Rates

Checking rates won’t affect your credit score

  • Fixed APR: 3.83%+8
  • Variable APR: 1.56%+8
  • Min. credit score: 670
  • Loan amount: $1,001 up to cost of attendance
  • Loan terms (years): 5, 10, 15
  • Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearance
  • Fees: Late fee
  • Discounts: Autopay, reward for on-time graduation
  • Eligibility: Must be an Indiana resident or a U.S. citizen attending an eligible Indiana school
  • Customer service: Email, phone, chat
  • Soft credit check: Yes
  • Cosigner release: After 48 months
  • Loan servicer: American Education Services

MEFA

MEFA student loans are available from $1,500 up to your certified cost of attendance (minus any other financial aid you’ve received) with terms from 10 to 15 years.

Keep in mind that you must attend a public or nonprofit school to work with MEFA — for-profit schools aren’t eligible.


4.4


Credible rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

MEFA Private Student Loans

Ready to find a student loan?
Compare rates from top private lenders to find the right student loan for you.

Check Personalized Rates

Checking rates won’t affect your credit score

  • Fixed APR: 3.75%+
  • Variable APR: N/A
  • Min. credit score: 670
  • Loan amount: $1,500 up to cost of attendance less aid
  • Loan terms (years): 10, 15
  • Repayment options: Full deferral, interest only, immediate repayment, academic deferral, forbearance
  • Fees: None
  • Discounts: None
  • Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.
  • Customer service: Email, phone
  • Soft credit check: Yes
  • Cosigner release: After 48 months
  • Loan servicer: American Education Services (AES)

Learn More: Student Loan Requirements: How to Qualify for a Student Loan

Methodology

To find the “best companies,” Credible looked at loan and lender data points from 10 categories to give you a well-rounded perspective on each of our partner lenders. Here’s what we considered:

  • Interest rates
  • Repayment terms
  • Repayment options
  • Fees
  • Discounts
  • Customer service availability
  • Eligibility criteria
  • Cosigner release options
  • Whether the minimum credit score is available publicly
  • Whether consumers could request rates with a soft credit check

Our hope is that this will be a win-win situation for you and us — we only want to get paid if you find a loan that works for you, not by selling your data. This means Credible will only get paid by the lender if you finish the loan process and a loan is disbursed. Additionally, Credible charges you no fees of any kind to compare your loan options.

Other private student loan lenders to consider

Here are more private student loan companies we evaluated. Note that you might need to apply with a creditworthy cosigner to potentially qualify with these lenders if you have poor or no credit.

Also keep in mind that these lenders aren’t offered through Credible, so you won’t be able to easily compare your rates with them on the Credible platform like you can our partner lenders.

Lender
Loan terms (years)
Cosigner release


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

5, 10, 15
After 24 months
  • Rates:
    Fixed, variable
  • Min. credit score:
    Does not disclose
  • Loan terms (years):
    5, 10, 15
  • Cosigner release:
    Yes
  • Min. GPA:
    No
  • Repayment options:
    Full deferral, full months payment, fixed/flat repayment, interest only, academic deferral, forbearance
  • Fees:
    Late fee
  • Discounts:
    Autopay
  • Eligibility:
    Must be U.S. citizen or permanent resident.
  • Customer service:
    Email, phone, chat
  • Soft credit check:
    Does not disclose


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

15, 20
(depending on degree type)
No
  • Fixed APR:
    4.84% – 12.39%6
  • Variable APR:
    1.59% – 11.37%6
  • Min. credit score:
    Does not disclose
  • Loan amount:
    Up to cost of attendance
  • Cosigner release:
    No
  • Loan terms (years):
    15, 20
  • Min. GPA:
    No
  • Repayment options:
    Full deferral, full monthly payment, fixed/flat repayment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability
  • Fees:
    None
  • Discounts:
    Autopay, good grade discount, cash reward for on-time graduation
  • Eligibility:
    Must be a U.S. citizen, permanent resident, or international student with a qualifying cosigner, as well as be making satisfactory academic progress.
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes
  • Loan servicer:
    Discover Bank


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

5, 7, 10, 12, 15, 20
No
  • Rates:
    Fixed, variable
  • Min. credit score:
    650
  • Loan terms (years):
    5, 7, 10, 12, 15, 20
  • Min. GPA:
    No
  • Cosigner release:
    No
  • Repayment options:
    Full deferral, full month payment, fixed/flat repayment, interest only, academic deferral, military deferral, forbearance
  • Fees:
    None
  • Discounts:
    Autopay
  • Eligibility:
    A U.S. Citizen or permanent resident. Not available in KY or NV.
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

20
After 24 months
  • Min. credit score:
    Does not disclose
  • Loan amount:
    $1,000 to $150,000
  • Loan terms (years):
    10, 15, 20
  • Min GPA:
    No
  • Cosigner release:
    Yes
  • Repayment options:
    Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance
  • Fees:
    None
  • Discounts:
    Autopay
  • Eligibility:
    Available in all 50 states
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

Does not disclose
Does not disclose
  • Min. credit score:
    Does not disclose
  • Cosigner release:
    Does not disclose
  • Loan terms (years):
    5, 10, 15
  • Min. GPA:
    No
  • Repayment options:
    Fixed/flat repayment, interest only, forbearance
  • Fees:
    Late fees
  • Discounts:
    Autopay, on-time graduation
  • Eligibility:
    Does not disclose
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

5, 10, 15
After 48 months
  • Rates:
    Fixed, variable
  • Min. credit score:
    Does not disclose
  • Loan terms:
    5, 7, 15
  • Min. GPA:
    No
  • Cosigner release:
    Yes
  • Repayment options:
    Full deferral, interest only, immediate repayment, academic deferral, military deferral, forbearance
  • Fees:
    Late Fee
  • Discounts:
    Autopay
  • Eligibility:
    Must be a U.S. citizen
  • Customer service:
    Email, phone
  • Soft credit check:
    Does not disclose


Credible Rating



Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

5, 10, 15
After 24 months
  • Rates:
    Fixed, variable
  • Min. credit score:
    Does not disclose
  • Loan terms (years):
    5, 10, 15
  • Min. GPA:
    Yes
  • Cosigner release:
    Yes
  • Repayment options:
    Full deferral, fixed/flat repayment, interest only, immediate repayment, academic or military deferral, forbearance
  • Fees:
    None
  • Discounts:
    Autopay
  • Eligibility:
    Must be a US Citizen or permanent resident
  • Customer service:
    Email, phone
  • Soft credit check:
    Yes
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3 steps to getting a student loan without a cosigner

There are ways to get a student loan without a cosigner, even if you have bad credit.

1. Borrow the maximum amount of federal student loans first

If you need to borrow for school, it’s generally a good idea to take out federal student loans first. This is mainly because these loans come with federal benefits and protections — such as access to income-driven repayment plans and student loan forgiveness programs. Many federal loans also don’t require a credit check.

Tip: Also be sure to research college scholarships and grants — since unlike student loans, these don’t have to be repaid. There’s also no limit to how many you might be able to get, so it’s worth applying to as many scholarships and grants as you possibly can.

Here are the main federal student loans that might be available to you:

  • Direct Subsidized Loans are available to undergraduate students with financial need and don’t require a credit check. The government will cover the interest on these loans while you’re in school.
  • Direct Unsubsidized Loans are available to both undergraduate and graduate students regardless of financial need. Like subsidized loans, unsubsidized loans don’t require a credit check. However, you’re responsible for all of the interest that accrues on these loans. Keep in mind that dependent students might be eligible for more unsubsidized loan funding if their parent doesn’t qualify for a Parent PLUS Loan.
  • Direct PLUS Loans come in two types — Grad PLUS Loans for students who want to pay for grad school and Parent PLUS Loans for parents who want to help pay for their child’s education. Unlike Direct Subsidized and Unsubsidized Loans, you’ll have to undergo a credit check and must not have an adverse credit history to take out a PLUS Loan. These loans also come with higher interest rates than other federal student loans.
Loan type Pros Cons
Direct Subsidized Loans
  • Based on financial need
  • Don’t pay interest while in school at least half time
  • Six-month grace period after graduation1
  • Only available to undergrads
  • Can defer student loans, but if you put your loans in forbearance interest will still accrue
Direct Unsubsidized Loans
  • Not required to demonstrate financial need, so the amount you can take out is higher than subsidized loans
  • Available to undergrad and grad students
  • Interest accrues immediately from the date of disbursement, though you’re not required to pay interest until you finish school
Direct PLUS Loans
  • Available to grad students and parents of dependent undergrads
  • Can take out up to your school’s certified cost of attendance (minus other financial aid you’ve received)
  • Higher interest rates
  • 4.228%2 disbursement fee
1Meaning that any interest that accrues during your college career and six months afterward is completely paid for
2 For the 2021-22 academic year

Check Out: How to Apply for Federal and Private Student Loans

2. Fill in the gaps with private student loans

After you’ve exhausted your scholarship, grant, and federal student loan options, private student loans could help fill any financial gaps left over.

However, keep in mind that if you have poor or no credit as well as no cosigner, you’ll likely end up with higher interest rates. Because of this, it’s best to treat private student loans as a last resort, since they’ll be more expensive in the long run.

Tip: It’s critical to shop around and compare as many lenders as possible before you borrow. This way, you can find a loan with the most optimal rate and terms for your situation.

Also be sure to borrow only what you need to keep your future costs as low as possible.

You can find out how much you’ll owe over the life of your federal or private student loans using our student loan calculator below.

Enter your loan information to calculate how much you could pay

Total Payment
$

Total Interest
$

Monthly Payment
$

With a
$
loan, you will pay
$
monthly and a total of
$
in interest over the life of your loan. You will pay a total of
$
over the life of the
loan, assuming you’re making full payments while in school.


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3. Build credit during college

Many college students don’t yet have the necessary credit to qualify for private student loans on their own. If this is the case, it could be a good idea to focus on building your credit while you’re still in school.

A few ways to potentially do this include:

  • Becoming an authorized user: One of the easiest ways to start building credit as a college student is to become an authorized user on the credit card account of someone you trust. If they make on-time payments and keep their balance relatively low, it will benefit your credit in turn — without you even needing to use the card.
  • Making payments on your student loans: If you can afford it, consider making payments on your federal or private student loans while you’re still in school. This could have a positive impact on your credit over time as well as help you lower the amount you’ll owe after you leave school.
  • Getting a secured credit card: This type of credit card is secured by a cash deposit that acts as your credit limit. Some secured cards are geared toward borrowers with poor credit while others are designed for students looking to build their credit. As you use the card and make on-time payments, you could see your credit score begin to grow. You might also have the option to convert the card into a regular credit card after making a certain number of on-time payments — meaning you’ll also get your deposit back.
  • Taking out a credit-builder loan: This type of loan is designed to help borrowers build a positive payment history to improve their credit score. You’ll make payments over a short repayment term that will be deposited into a savings account. Once your term is over, you’ll get the deposited amount back, minus any interest or fees.

Check Out: Student Loan Limits: How Much in Student Loans You Can Get

Can I be a student loan cosigner with bad credit?

Cosigners are typically required to have good to excellent credit — which means you likely won’t be eligible to cosign a loan if you have bad credit. A good credit score is usually considered to be 700 or higher.

If you have poor credit and want to cosign a loan in the future, it’s a good idea to focus on building your credit beforehand.

Learn More: What to Do If You’re Denied a Student Loan With a Cosigner

Do I need a cosigner for student loans?

This depends on the type of student loan you want to get as well as your credit.

  • Federal student loans: Most federal loans — including Direct Subsidized and Unsubsidized Loans — don’t require a credit check or a cosigner. If you’re a dependent student, keep in mind that you might also qualify for unsubsidized loan funding if your parent isn’t eligible for a PLUS Loan.
  • Private student loans: Unlike federal loans, all private student loans require a credit check. You’ll also generally need good to excellent credit to be eligible. Because many college students don’t yet have sufficient credit history to get approved on their own, it could be difficult to qualify without a cosigner. While some lenders offer private student loans for bad credit, remember that these loans usually come with higher interest rates compared to good credit loans.

Check Out: The Right Cosigner Can Save Students Thousands on Their Student Loans

Who can be a student loan cosigner?

Many college students rely on one of their parents to cosign private student loans. However, a cosigner doesn’t have to be a parent. A student loan cosigner can be anyone with good credit — such as a relative, or trusted friend — who is willing to share responsibility for the loan.

Just keep in mind that your cosigner will be on the hook if you can’t make your payments.

Tip: Several lenders offer a cosigner release option with their student loans. Before you can apply to remove your cosigner from the loan, you’ll typically need to make consecutive, on-time payments for a certain period of time as well as meet the underwriting criteria on your own.

If you decide to take out a private student loan — with or without a cosigner — remember to compare as many lenders as you can to find the right loan for your situation.

This is easy with Credible: You can compare your prequalified rates from multiple lenders in just two minutes.

Compare student loan rates from top lenders

  • Multiple lenders compete to get you the best rate
  • Get actual rates, not estimated ones
  • Finance almost any degree

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About the author

Dori Zinn

Dori Zinn

Dori Zinn is a student loan authority and a contributor to Credible. Her work has appeared in Huffington Post, Bankate, Inc, Quartz, and more.

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Multilateral Lenders and Regional Development Banks https://atriunfar.net/multilateral-lenders-and-regional-development-banks/ https://atriunfar.net/multilateral-lenders-and-regional-development-banks/#respond Thu, 19 Aug 2021 07:02:47 +0000 https://atriunfar.net/?p=590 Multilateral Lenders and Regional Development BanksI Introduction to and role in project financings i Nomenclature and identification of development banks Outside of commercial banks, there is a wide range of multilateral financial institutions that provide loans for international project financings, with a wide range of terminology looking to distinguish between them and their purposes, especially to the extent this purpose […]]]> Multilateral Lenders and Regional Development Banks

I Introduction to and role in project financings

i Nomenclature and identification of development banks

Outside of commercial banks, there is a wide range of multilateral financial institutions that provide loans for international project financings, with a wide range of terminology looking to distinguish between them and their purposes, especially to the extent this purpose is non-commercial. Equally, there are some non-multilateral financial institutions that perform similar functions to multilaterals and are helpfully considered in this context.

The multilateral aspect is a critical distinguishing feature, with key institutions being established by more than one country as international financial institutions (IFIs), which are subject to international law from an organisational perspective (although in practice their direct lender loans in project financings will tend to designate a country or state governing law such as English law or New York law).

Historically, key IFIs were established following World War II as a way in which to rebuild countries devasted by war and to bring back balance and stability to the global financial system, with the first being the International Bank for Reconstruction and Development (IBRD) in 1944. This is now part of the World Bank Group of five international institutions, with the initial mission of providing financing to war-torn countries changing over the years to a focus on economic development.

The World Bank Group now consists of:

  1. the IBRD (established in 1944 and focused on financings where a sovereign guarantee is in place);
  2. the International Development Association (IDA) (established in 1960, and focused on concessional financings usually with sovereign guarantees);
  3. the International Finance Corporation (IFC) (established in 1956 and focused on financings without sovereign guarantees in the private sector);
  4. the International Centre for Settlement of Investment Disputes (established in 1965 and focused on assisting governments in reducing country risk); and
  5. the Multilateral Investment Guarantee Agency (established in 1988 and focused on providing insurance against political and certain other risks to the private sector).

Within the World Bank Group, the IFC is the institution that is seen most often performing a development bank role.

The distinguishing feature of a development bank as the term is usually used is that it provides financing (debt but sometimes also equity and other products) for strategic economic development purposes on a non-commercial (or not fully commercial) basis. Within this there is a distinction between multilateral development banks, which may be regional in focus or global (together, MDBs), development banks that are highly active globally as well as domestically but are not IFIs (the most active of these being China Development Bank), development banks that are active primarily in their domestic market, and finally banks that have the words ‘development bank’ in their name or self-describe themselves as such but lend on a commercial basis only.

Given that MDBs will typically not be regulated as banks in specific jurisdictions and not deposit-taking in the ordinary sense of the word, alternative terms such as multilateral finance institutions, development finance institutions or similar may be seen as more accurate; however, colloquially these types of institutions continue to be usually referred to as development banks.

ii Key development banks in project financings and their focus

MDBs are created when a group of countries agree on a common mission that they believe the private sector is not adequately covering, with the majority of institutions being mandated to encourage economic development and catalyse international cooperation, integration and trade objectives.

While the IBRD was set up in 1944, its constitutional documents provide that it can only lend to governments of member countries, and so it is not a source of financing for non-recourse or limited-recourse project financings. Recognising the importance of mobilising and supporting private sector development, in 1956 the IFC was established as part of the World Bank Group, and the IFC is able to lend to private sector projects (including on project finance terms), along with providing a range of investment and advisory services to support private sector developments.

Following the establishment of the World Bank Group, the major regional development banks were established: in 1959 the Inter-American Development Bank (IADB), in 1963 the African Development Bank (AfDB), in 1966 the Asian Development Bank (ADB) and in 1991 the European Bank for Reconstruction and Development (EBRD). These MDBs were focused on specific geographic regions at a continent level, and there are also a number of MDBs that have been established over the years that are focused on even narrower regions such as the Development Bank of Latin America, the Eurasian Development Bank and the West African Development Bank. Less commonly, some MDBs are focused on non-geographic regions, such as the Islamic Development Bank (IsDB) that was established in 1975. More recently, two China-headquartered MDBs have been established, namely the New Development Bank (NDB) in 2014 and the Asian Infrastructure Investment Bank (AIIB) in 2015.

The missions of the MDBs do evolve over time. The original mission of the World Bank Group (as it became) linked into the reconstruction of Europe, whereas the World Bank Group’s mission is now stated to be to end extreme poverty and promote shared prosperity. The countries covered by MDBs also change over time, so for example in the case of EBRD, Mongolia became a ‘country of operations’ (i.e., a country where projects could be supported) in 2006, and Morocco became a country of operations in 2012 – in fact, the country of operation of EBRD that received the most support by quantum over the past couple of years is Egypt, which is not traditionally seen as part of Europe.

iii Capitalisation, governance and shareholders

The number of member countries of an MDB varies dramatically. The IFC has 185 countries as member countries, thus including the vast majority of the countries in the world, whereas the NDB has only five member countries, namely Brazil, Russia, India, China and South Africa – hence it is sometimes referred to as the ‘BRICS Bank’. The IFC follows the original model of mixed ownership between borrowing and non-borrowing member states; however, there are institutions that only lend to non-member states such as the OPEC Fund for International Development (OFID), and institutions that only have borrowing countries as member states such as the NDB and the European Investment Bank (EIB) (although being a member state is not a requirement to be a borrowing country of these two institutions).

MDBs are funded in a variety of ways. For example, the IFC has paid-in capital and callable capital from member states, but also has an AAA credit rating from Standard and Poor’s and Moody’s, and the IFC also (as it states on its website) ‘issues bonds in a variety of markets, formats, and currencies—including global benchmarks bonds, green and social bonds, uridashi notes, private placements, and discount notes’. As the IFC is focused on non-concessional financing, it also has net earnings accrued from interest payments on loans. Other MDBs have similar sources of funding, although the exact mix varies from institution to institution.

From a governance and voting perspective, control tends to follow the size of contributions by members, typically counting both paid-in capital and callable capital. For example, looking at paid-in capital for the IFC, the top five shareholders are the United States, which has paid in 22 per cent, Japan (6 per cent), Germany (5 per cent), France (5 per cent) and the United Kingdom (5 per cent). By contrast, the top five countries of exposure for the IFC are India at 14 per cent, Turkey at 7 per cent, China at 7 per cent, Brazil at 5 per cent and Argentina at 3 per cent (the order changes for new commitments, in that Argentina falls down to ninth place with South Africa being in fifth place). The disproportionately large paid-in capital means that the US has veto power over major decisions at the IFC. The US is also the largest shareholder in the EBRD and IADB, the joint-largest in the ADB (along with Japan) and the second-largest in the AfDB (after Nigeria).

iv Purpose and evolving mission

As development banks are definitionally focused on non-commercial considerations, it is critically important to be clear what the purpose of a particular development bank is (or, more generally, what development banks should and should not be for). While in wide terms, development banks are typically seen as being there to encourage economic development and catalyse international cooperation, integration and trade objectives, there are risks if the mission is not carefully managed.

One key mission of development banks is typically seen as to help bring private financing to fund critical projects and correct market failures, while leaving the funding of bankable projects to the private sector. To the extent a project could be financed by commercial banks without development bank support, the development banks should focus on other projects. To the extent that a project does need development bank support to be bankable, this should ideally be done in a way that ‘crowds-in’ private finance, thus helping to develop the private sector while also multiplying the impact of the limited resources of a development bank. Development banks have been focused on developing innovative products (other than or in addition to direct lending) that help with this mission, as further discussed in Section III.

Another focus of development banks is economic development of a type that governments and countries are focused on from a policy perspective. These may be at an institutional level or across a group of development banks.

At the institutional level, an example would be EIB, established by the European Union and with its focus on boosting the EU’s potential in terms of jobs and growth, supporting action to mitigate climate change, and promoting EU policies outside the EU. EBRD similarly supports the transition to a green, low-carbon economy, looks to promote equality of opportunity through access to skills and employment, finance and entrepreneurship, and support for women, young people and other under-served communities. The newer institutions of AIIB and NDB intentionally focus more on critical physical infrastructure.

At the group level, an example would be that in 2020 a group of key development banks (the AfDB, ADB, AIIB, EBRD, EIB, IADB, the IFC, IsDB, NDB, the World Bank Group and the Council of Europe Development Bank) came together to solidify their collective support for the sustainable development goals (SDGs) that were adopted in 2015 as part of the 2030 Agenda for Sustainable Development. This meeting of the heads of these development banks looked at how they could support countries in achieving the SDGs by way of ‘finance, technical assistance, policy support and knowledge’.

II The benefits and challenges of development banks in project financings

Development banks can provide critical support to sustainable economic development as their focus is not primarily commercial, and so they look at their impact more widely.

The first is to facilitate and encourage private sector investments and financings. Involvement of a development bank in a project financing goes far beyond the financial support provided by the development bank. The involvement of a development bank usually gives a ‘halo’ to the project in question, with commercial financiers seeing it as a badge of credibility and also giving significant comfort (at a political if not legal level) that the project is less likely to be interfered with by a host government. Furthermore, commercial financiers in developing markets in particular are becoming increasingly aware and sensitive to non-commercial aspects of projects, such as environmental social and governance considerations, and the involvement of a development bank again gives significant comfort that the project meets these criteria, and is less likely to risk reputational damage in the future.

The second is to finance sectors that are critical for the development of a country, but that may not be able to access, or access sufficient, private financing. Private financing clinically assesses risk and country track record before financing a project. This can mean that private financing stays away from the countries and regions of most critical need, and the industry sectors where projects will have the greatest impact on the lives of people in the country. This means that commercial financing can be less available in frontier markets, and can be more readily available in sectors such as oil and gas and mining, than public good assets such as roads and hospitals.

The third is to provide countercyclical financing, reflecting that critical infrastructure and other economic development projects that are key to the development of countries should not wait for challenging private financing times to pass. This for example meant that development banks were expected to become more heavily involved in financing critical infrastructure after the 2008 global financial crisis with private sector financing pulled back significantly. Unlike commercial banks, development banks are not restricted by the new regulatory requirements introduced following 2008, prohibitive tax restrictions or the need to maximise profits for their shareholders. We may well be moving into a similar period, with challenges for private financing post- covid-19 emerging, and it being likely that development bank and other non-commercial funding sources will be necessary to meet the SDGs and other priorities of governments in the next decade.

An example of a project in a critical sector and challenging jurisdiction, which was assisted during a countercyclical period and where development bank assistance was used to leverage private sector involvement, was the IFC’s assistance to Wataniya Palestine, a greenfield telecoms operator in Palestine, during 2009 to 2012. This involved, among other things, a US$30 million share of an initial US$80 million initial financing, an equity investment during a public offering (of circa 1 per cent of publicly offered shares, showing IFC support), and a subsequent financing and refinancing, providing US$60 million, with other lenders providing a further US$65 million.

The above sets out some significant advantages for sponsors considering development bank involvement in a project; however, there are some challenges that development bank involvement can bring. Development bank processes can be longer and more involved than those for commercial banks, although on occasion this is arguably more perceived than real, as development banks are often involved in projects that any financier would need more time to evaluate and proceed with. The willingness of development banks to be involved is also often dependent on the private sector being unable to finance the project, as the aim of development banks is not to compete with private finance, rather to step in when the market does not adequately provide finance to an otherwise noteworthy project. Furthermore, development banks have limited resources and almost unlimited projects that could be financed or assisted, and so their wider mission will be critical in the choice of these projects. For example, the EIB will not support oil and gas projects, and when it finances into developing countries it is particularly focused on critical infrastructure or social goals. For example, electricity is a prerequisite for economic development and improving lives, and so development banks have been instrumental in encouraging off-grid electricity products, such as EIB’s financing and other assistance in 2018 to d.light design for solar systems to be installed across Ethiopia, Kenya, Nigeria, Tanzania and Uganda.

III Key products for project financing

There is no one-size-fits-all approach, with each MDB able to bring its own focus, financial products and learning to a project; however, there are commonalities in their products as discussed below.

While the World Bank Group separates out its different products to different institutions, with the IBRD focused on support with sovereign guarantee, IDA on concessional support with sovereign guarantee and the IFC on the private sector, the majority of development banks bring all these types of support under one umbrella. For example, the ADB would supply all these types of support (albeit grants are provided by the Asian Development Fund, a slightly separate institution under the ADB umbrella).

i Direct loans

The most stereotypical product offered by MDBs for project financings are loans, be those on concessional or non-concessional terms, which leverages not only the funds provided by member countries, but also the ability of MDBs to borrow money from international capital markets and re-lend it on projects in borrowing countries on more generous terms. EIB, for example, specifically notes that it can provide these directly to a borrower with attractive pricing, and with long tenors to match the economic life of a project. Post-2008, the long tenor is often as attractive as the rates, given the challenge that commercial banks now have with long tenors. It should be noted that attractive pricing may not necessarily be low in the context of commercial financings in more liquid jurisdictions, given that development banks are focused on challenging projects where the private sector is not willing or able to provide financing.

MDBs are increasingly looking to leverage their financings in direct loans, and so would typically look for their direct loan to unlock substantial private sector financing capacity for a project. For example, the EBRD is normally prepared to provide for private sector projects, in the form of debt or equity, up to 35 per cent of the long-term capital requirements of a project (or company), with these loans usually starting from a minimum of €3 million up to €250 million, with the average amount being €25 million.

ii Guarantees

In the past decade there has been increasing recognition that in addition to direct loans, in which the MDB takes all risks and uses its financial resources from the start to support a project, guarantees can be used to target and eliminate the risk or risks that are impeding private sector financing for a project that is desirable for economic development purposes, whereby financiers can transfer such risks that they cannot absorb or manage on their own to the MDB. Different MDBs have different criteria regarding in what circumstances guarantees can be offered. For example, in the case of ADB, guarantees can be provided when ADB has a direct or indirect participation in a project, be that through equity, a loan or even technical assistance.

These guarantees may be comprehensive or limited coverage depending on the MDB involved and what is appropriate for a particular project; however, in general terms there are two key guarantees offered by MDBs: partial credit guarantees, and political risk guarantees.

Partial credit guarantees cover financiers against non-payment risk on the guaranteed portion of the debt, and typically can be issued in respect of most forms of debt, including to support loans (including shareholder loans), public bonds and private placements, and other debt (e.g., financial leases, letters of credit).

Political risk guarantees (sometimes called partial risk guarantees) are useful in the situation that private sector financiers are willing to take commercial or credit-related risks, but are unable or unwilling to take some or all political risks that may arise in a project. It could thus cover specific risks that are perceived in that jurisdiction such as expropriation, or could cover the project-specific risk that a public entity or country does not comply with its contractual obligations that could lead to non-repayment, for example, where a state-owned entity is the offtaker in a power project. As an example, in a power project, a state-owned offtaker could enter into a power purchase agreement with a project company, the host government guarantees the offtaker’s obligations, and then the MDB would be willing to issue a political risk guarantee to the financier of the project company, with the host government typically expected to enter into a counter-indemnity with the MDB (in some cases this can change the guarantee pricing, as between those without an indemnity being priced at a market rate, whereas those with a counter-indemnity being priced lower).

iii A/B loans, parallel loans and risk participations

As part of an MDB’s focus on leveraging its capital to multiply its impact, a variety of instruments may be used to involve other financiers in a financing that the MDB is providing.

Commercial banks in particular often find lending under an A/B loan structure highly attractive. This involves the commercial bank participating in a loan agreement with the MDB acting as lender of record (this participation is referred to as the B loan, with the A loan being the MDB’s retained portion). The B loan typically benefits from the full range of advantages that MDB debt benefits from, including exemption from various events and taxes in most countries given the MDB is an international financial institution (e.g., exemptions from currency conversion restrictions, remittance restrictions, withholding taxes, provisioning requirements), and also it is much less likely that MDB debt will be caught by rescheduling of external debt by a country. In effect, the B loan gives some political risk protection without any recourse to the MDB being given. There are also benefits for the project company, in that the MDB remains the sole lender of record, hence simplifying administration, and also it can enable longer tenor financings. This arrangement is effected by a loan agreement between the MDB and the project company, and then a participation agreement between the MDB and the commercial bank or banks. Where the B loan is in the domestic currency, the ADB refers to this as a C loan under its ‘complementary financing scheme’; however, structurally this remains the same.

MDBs also use parallel loan structures, which would be the structure used when co-financing with other MDBs or sovereign entities, whereby each co-financier enters into its own loan agreement with the project company, and then a common terms agreement sets out the general terms of the financing, with any facility-specific terms being in the separate loan agreements. This is a particularly appropriate structure when it is inappropriate for a co-financier to benefit from the MDB’s preferred creditor status and other privileges and immunities as set out above, and is also often used for domestic currency financings. On occasion, financings arranged by an MDB may involve both A/B loans and parallel loans, and there are differences in practice; for example, B loans generally have a shorter tenor than A loans, whereas parallel loans often have the same tenor as A loans.

Finally, many MDBs also enter into risk transfers, for example unfunded risk participations with insurance companies, or (in the case of the IFC and ADB) managed co-lending portfolio programmes with insurance companies and other institutional investors. The unfunded risk participation product typically reflects the differing approach of insurance companies to deal management, and so there tends to be limited voting and consultation with the insurance companies, as compared to B loans and parallel loans where the co-financiers would generally expect voting rights in accordance with their proportion of the financing. The managed co-lending portfolio programmes take this further, with the investor not actively choosing specific projects, rather these being selected by the MDB as appropriate according to agreed criteria, and with the MDB making all decisions. Each of these products also allows the risk participant to benefit from the MDB’s preferred creditor status and other advantages referred to above.

IV Outlook

One of the key advantages of MDBs is that they are able to be countercyclical, and provide financing to developing countries at times when it is most needed. This role was critical during the 2008 global financial crisis, when key MDBs (the World Bank Group, IADB, ADB, ADB, AfDB and the EBRD) provided US$222 billion of financings. The MDBs have similarly stepped up financing during the covid-19 shocks impacting countries during 2020, with the UK Treasury estimating that MDBs approved US$132.5 billion of financings. Nevertheless, over US$39 billion of this amount was from EIB, which, given its role of funding within the EU, has a ‘domestic’ element to its work that is not linked to developing countries, and so the overall picture is that the MDB response to covid-19 so far has been less dramatic than during the 2008 global financial crisis.

This more limited response may be understandable from a projects perspective given that 2020 was a time of uncertainty, and so how and what to support was not entirely clear. Nevertheless, there will be significant demands on the MDBs to provide the countercyclical support that will be necessary in the coming years, particularly given their collective stated aims to achieve the SDGs by 2030.

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Find that direct lender loans once you have been refused elsewhere https://atriunfar.net/24-hour-cash-loans/ https://atriunfar.net/24-hour-cash-loans/#respond Thu, 19 Aug 2021 02:40:11 +0000 https://atriunfar.net/find-that-loan-once-you-have-been-refused-elsewhere/ Find that direct lender loans once you have been refused elsewhereFind that direct lender loans whenever you’ve been turned down elsewhere Would you give my information to advertising agencies? We will not provide any information to any organization as an ongoing business. However, we do offer some computer data that can be used to help you get access to this loan by visiting as at https://oakparkfinancial.com/direct-lender-loans/. We don’t […]]]> Find that direct lender loans once you have been refused elsewhere

Find that direct lender loans whenever you’ve been turned down elsewhere

Would you give my information to advertising agencies?

We will not provide any information to any organization as an ongoing business. However, we do offer some computer data that can be used to help you get access to this loan by visiting as at https://oakparkfinancial.com/direct-lender-loans/. We don’t use marketing outside to reach out to our customers. More information can be found in our Privacy Statement.

Do you know which short term loans are best for people who have bad credit?

There are many things you should consider when trying to find the right loan provider for bad credit loans. Consider the reputation of your lender and their APRs before you make any decision regarding additional fees. To get the best bad credit payday loans for you, you need to compare what bad credit direct loan providers have to offer and how they compare with your needs.

Thanks to the reputation of the direct lender loans and the APRs they present, you should take everything into account before deciding if they charge additional fees. Compare the payday advances available to dismal credit customers and make sure you are comparing their rates to you.

By doing this you can have a greater chance of finding the right payday lender, and therefore a more useful case for yourself. Financial experts advise that you do all your research before you decide to borrow a loan. This is usually a major influence on what is possible, and thus how long it will take. Brand Brand New Horizons will help you make a more informed decision, knowing that their partner has the best available bad credit loans for you from their direct payday lenders.

Does mining a refunded mean that we have a bad credit record?

Many people choose to set a repayment date because of many reasons. One example is that an invoice might be in dispute and a repayment deadline may be passed. Refunding a product once will not automatically damage your credit rating. Do not make a single payment on a financial obligation.

Certain companies might not make an individual payment. If this happens, you may earn other prior and since payments on time while simultaneously paying other debts.

How can my credit rating be improved?

If your credit score is not good, it may be difficult to obtain credit from major loan companies. If you are looking to improve your credit score, time is the best friend. However it is crucial that you make all payments on time. It is essential to confirm that Experian Equifax, Equifax, CallCredit and Experian hold you accountable for your credit score. A mistake could cause your rating to drop. In order to improve your creditability, you should also close all unused bank cards, bank card, bank cards, and catalogs.

What should I do if I need help paying my debts?

There are many companies available to help you if you feel overwhelmed by debt and need advice. Here are three companies who could be of assistance to you.

Do you need a loan for your business?

Apply today to have the money in you bank. It takes just a few seconds and will not affect your credit history.

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