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1. Application of clear method for explaining the vital areas of project, program and management of portfolio conducts that is applicable to asset rich organizations.
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Week 3: Explanation and exploration of the financing of projects
Race P., 2010. A Practical Guide to Assessment, Learning and Teaching. Abingdon, England: Routledge.
Timmins F., 2008. Making Sense of Portfolios: An Introduction to Portfolio use for Nursing Students. Glasgow, Scotland: McGraw-Hill Education.
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Project Finance
From the course, I learned that financing of projects does not offer any recourse. If the revenues of the project are not enough for reducing debt, the lenders will not be able to claim against the project owner beyond the project’s assets. Moreover, I now understand that project finance is used for describing the financing of any legal organization, whose revenues will be accepted by a lender as a funding source through which loan repayment will take place.
Financial Loan Structuring
The course provided me a clear concept regarding the ways in which a financial loan is efficiently structured. I gained the knowledge that a loan package for the asset rich organizations should achieve the objectives of long-term debt maximization, fixed-rate financing and minimizing refinancing risk.
Risk Management of Projects of Asset Rich Organizations
The course provided me with knowledge regarding risk identification of any project that serves as a vital step before allocation and evaluation. I gathered an understanding that financial, revenue and commercial risks are common types of project related risks. Moreover, I now understand that lenders can allocate some risks while project financing such as completion, political, commercial, uninsurable and foreign exchange risks. I came to understand from the course that lenders want viable projects through assessing its adequacy of estimated cash flows by measuring projects debt service and coverage ratio.
Key Parameters Used By Lenders Wile Financing Projects
The course provided me with the knowledge that the lenders considers certain parameters such as overall project size, milestones, break-even dates and loan summary of the asset rich organizations before financing their projects. I now understand that the financial engineers employ specialized financial instruments such as financial market forecasting, asset/liability management and development of derivative securities and instruments for ensuing success of a project through adequate financing of them.
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Levy, 2012. Chapters 5.
Edwards at al., 2010. Chapter 26.
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