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Project Finance

Project Finance

Product Introduction

Project Finance has the following characteristics:

  1. 1、Project finance loans are usually used for the construction and operation of one or a set of large projects (including construction projects, reconstruction projects, expansion projects, and projects that are already in operation), or refinancing existing loans. Specific projects generally include infrastructure projects and energy projects.

  2. 2、The borrower is usually a SPV especially established for the construction, management and operation of the project. The existing and future assets of the borrower and its associated subsidiaries are generally used as collateral for the loans. The project sponsor/shareholder is generally one or several funds with relevant operating and investment experience, or other types of companies.

  3. 3、The source of the repayment fund is mainly from the sales income, subsidy income or other income generated by the project, and funds obtained from refinancing.

    Projects are generally financed by syndication loans.

Target Customers and Conditions

  1. 1、 The applicant is a SPV especially established for the project construction and operation. Its holding subsidiaries and major shareholders shall have good credit with no major adverse records.

  2. 2、  The borrower should have the capacity and operating qualifications relating to the project.

  3. 3、Generally used for large-scale infrastructure projects, such as power facilities, infrastructure services, high-level roads, bridges, tunnels, railways, airports, urban water supply and sewage treatment plants, and other construction and operation projects with large-scale investments and long-term stable expected income.

  4. 4、Other requirements by China Merchants Bank New York Branch.

Business Procedures

  1. 1、Business application. The borrower shall apply for project financing from the bank, provide relevant materials according to the general requirements of credit line, and provide a project evaluation report issued by an independent engineer, project advisory report, and relevant contractual documents. If relevant formalities are not completed, the applicant should provide the progress statement respectively.

  2. 2、Due Diligence. The borrower, leading bank and agent bank shall cooperate with China Merchants Bank New York Branch conduct a due diligence on the loan.

  3. 3、Review and approval. China Merchants Bank New York Branch shall review and approve the loan according to its credit line approval process, and provide opinions concerning the loan structure, covenants and conditions.

  4. 4、Contract signing.

  5. 5、Funding of the loan and payment.

  6. 6、Post-loan management.

  7. 7、Loan repayment.