Bt project financing methods BT projects in the world often involve project financing, but in China, except for listed companies, non-listed companies still have limited financing channels through BT projects. As more and more domestic enterprises set foot in BT projects, it will be the general trend to solve the fund gap needed for project investment and construction through project financing, no matter from the project scale or their own investment strength. For investors, it is also one of the compulsory courses in the process of transformation to broaden financing channels, reduce financing costs and improve investment efficiency while doing BT projects.
At present, the common financing methods in China mainly include bank loans, corporate bonds, medium-term notes and trust financing.
1. Bank loans include loans from commercial banks, loans from China Development Bank and loans from international financial organizations. Among them, the National Development Bank loans tend to choose energy infrastructure projects such as land-level development and affordable housing, as well as some key projects supported by national industrial policies. For example, the rapid development of photovoltaic industry in recent years has obtained hundreds of billions of loans from CDB. Loans from international financial organizations, including ADB loans and World Bank loans, focus on improving the economic development level of member countries, especially in infrastructure projects, including energy projects. Different loans have different policy tendencies. Compared with traditional commercial bank loans, CDB loans have the advantages of long term and low interest rate, but the relatively low financing cost corresponds to higher application conditions, especially loans from international financial organizations.
2. Corporate bonds are a good financing method in fixed assets investment projects, and some enterprises with large net assets can use BT projects to issue corporate bonds for financing. The issuance of corporate bonds shall be subject to the examination and approval system, which shall be examined and approved by the National Development and Reform Commission. At present, the National Development and Reform Commission has issued a number of documents to create a green channel for the financing of enterprises' affordable housing projects. Except for the condition that the total amount of bonds issued does not exceed 40% of the net assets of the enterprise, the average distributable profit of the enterprise in the last three years should be enough to pay the bond interest for one year. These two conditions put forward high requirements for many enterprises with irregular financial conditions when financing abroad.
3. Medium-term notes, short-term financing notes and private placement notes are all financing tools of the Association of Dealers in the Inter-bank Market, and the registration system is implemented. As long as you are registered as a member of the Association of Interbank Market Dealers, you can raise funds through the interbank market. There are no restrictions on the use of funds for financing instruments in the interbank market. Compared with corporate bonds, the cost of medium-term notes financing is relatively low, but because the investors in the interbank market are mainly institutional investors such as insurance and futures, the risk control is strict, so the credit rating requirements for financing enterprises are relatively high.
4. Trust financing. In recent years, with the macro-control of the real estate industry by the state, real estate trust and political trust cooperation trust have shown a good development momentum. Compared with bank loans, the financing cost of trust is higher, but its financing policy is more flexible. Therefore, in the case of tight money, trust financing is still being chased by the market. However, in recent years, there have been many redemption crises in the trust industry, including Zhuji Project of Zhejiang Anxin Trust, Dalian Shide Project of Hua 'ao Trust, Shanxi Mining Project of China Chengxin Trust, etc. (Considering the stability of the financial market and the brand management of trust institutions, most of the current crises have been solved through early redemption).
As far as construction enterprises are concerned, whether they carry out trust financing as investors of BT projects or cooperate with the government as construction units of BT projects or government projects, they should be clear about the ways of trust financing and the risks involved. In practice, many trust companies require the financing party to provide the general contractor's guarantee. In order to undertake the project or promote the progress of the project and create favorable conditions for their own collection, the general contractor provides joint guarantee for repayment or equity repurchase to the trust institution when Party A carries out trust financing. In this case, the guarantee construction enterprises should pay attention to identify the risks of the project itself, investigate the debt status of the project, and whether there is debt risk except explicit debt, so as to avoid unnecessary risks and losses caused by blind guarantee.
Main features of bt project financing Compared with traditional financing methods, project financing has the following features:
1. Exclusivity of financing subject.
Project financing mainly depends on the future cash flow of the project itself and the assets formed, rather than relying on the credit of the project investors or sponsors and assets other than the project itself to arrange financing. The exclusiveness of financing subjects determines that creditors are concerned about how much of the future cash flow of the project can be used for repayment, and its financing amount and cost structure are closely related to the future cash flow and asset value of the project.
2. Limitation of recourse.
In traditional financing methods such as loans, creditors pay more attention to the credit and real assets of project borrowers while paying attention to the investment prospects of the project, and the right of recourse is complete; As mentioned above, the project financing method is project-based. Unless otherwise agreed with the signatory, the creditor cannot recover any form of assets other than the project itself, which means that the project financing depends entirely on the future economic strength of the project.
Due to the exclusiveness of the financing subject and the limited recourse, the decentralized financing of bt projects determines the full display of various risk factors and benefits as project signatories. Determine the maximum risk that all participants can bear and the possibility of cooperation, and use all advantages to design the most favorable financing plan.
4. Diversity of project credit
Provide diversified credit support for all future risk points of the project to avoid and resolve uncertain project risks. If the project is necessary? Product? Some buyers sign long-term purchase contracts (agreements), and raw material suppliers supply goods at reasonable prices to ensure strong credit support.
5. Complexity of project financing procedures
The project financing is large in amount, long in term and wide in scope, covering all aspects of the overall design and operation of the financing scheme, and requires many legal documents. Its financing procedure is more complicated than traditional financing. Moreover, the proportion of upfront expenses to the total financing is inversely proportional to the project scale, and its financing interest is also higher than that of corporate loans.
Although project financing is more complicated than traditional financing, it can achieve the goal that traditional financing can't.
First of all, the limited recourse clause ensures that project investors will not risk other assets of investors when the project fails;
Two, in the national and government construction projects, for? See? For large-scale construction projects, the government can deal with the negative impact of debt on the government budget through flexible and diverse financing methods;
Third, for multinational companies to conduct overseas joint venture investment projects, especially for enterprises that have no operational control rights or invest in high-risk countries or regions, other businesses of the company can be effectively separated from project risks, thus limiting project risks or national risks.
It can be seen that project financing, as a new financing method, has greater attraction and operating space for large-scale construction projects, especially capital-intensive projects such as infrastructure, energy and transportation.