How to maximize your infrastructure finance project

March 08, 2023

Project finance is complex, involving many counterparties, various risks and often significant financial investments. Learn how partnering with a global corporate trustee can help you navigate these intricate transactions..

 

Each infrastructure finance deal is unique with its own specific structure, challenges and requirements. The instruments used will dictate what type of services you’ll need. Some circumstances might call for multiple service providers, but a more ideal solution is to find one provider that can perform all necessary roles.

 

Roles of a trustee and agent

Due to the labor-intensive nature of project finance transactions, the trustee and agent play a key role in managing communication between various stakeholders. Working with a full-suite corporate trustee can add value, significantly enhancing the operational efficiency of the project. Whether the infrastructure asset is financed by loan or note issuance, having a partner that can provide the full breadth of roles can help ensure seamless servicing throughout the life of the project.

Roles that may be required on the financing include:

  • Facility/loan/administrative agent: primary contact between the borrower and lenders for information and cash movement 
  • Trustee: protects investor interests
  • Noteholder agent: primary contact for information and proceeds on note issuance, including privately placed notes 
  • Collateral/security agent: holds security for the benefit of creditors
  • Intercreditor agent: coordinates different classes of creditors 
  • Account bank: holds project accounts and manages transaction cash
  • Escrow agent: holds escrow proceeds if required for an asset financing 
  • Common depository: holds cleared notes within clearing systems (Euroclear/Clearstream, DTC)
  • Settlement agent: primary contact for security eligibility with clearing systems and facilitates security movement between investors and issuer/borrower on closing 
  • Paying agent: facilitates payment of debt service proceeds to investors

 

Rely on a full-service partner

Appointing a third-party trustee and agent to perform all roles can produce numerous efficiencies and benefits. Some of these include the following:

  • Coordination of multiple stakeholders and workstreams 
    • Onboarding 
    • Account and deal setup 
    • Documentation 
       
  • Assistance for investors at every stage of the project lifecycle 
    • Coordination of complex project consents, waivers and amendments 
    • Project monitoring 
    • Proactive collection and distribution of project information and covenants
       
  • Streamlined operations 
    • Pricing synergies for being appointed on multiple roles 
    • Engagement of a single law firm for the trustee and agent 
    • Enhanced internal and external communication

 

Trusted expertise

Service providers vary greatly in terms of size, specialization and experience. For a successful relationship, investors should look for a highly rated financial institution that is appropriately licensed in all necessary jurisdictions.

Finding a partner with extensive experience servicing all debt vehicles can help guide your decision-making with strategic insights and proactive solutions.

Infrastructure finance projects become less complex and more manageable when you work with a reputable, independent partner for your debt administration needs.

 

U.S. Bank administers a variety of infrastructure asset types, and we have the dedicated expertise to assist investors at every stage of the project lifecycle. Check out our extensive suite of services for debt financing here or contact Lars Anderson at lars.anderson@usbank.com or Alejandro Hoyos at alejandro.hoyos@usbank.com.

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