Selecting the right depositary bank and collateral agent/trustee for your infrastructure project

Project financing has changed over the years to include a more multi-faceted structure. In the past the purpose of the financing may have been to simply build a facility however, today, it is not uncommon for a single project to be divided into multiple phases or be composed of multiple facilities in order to meet the long range goals of the project. The financing for this type of structure may include multiple loan types with different parameters, include additional time frames for equity contributions or other types of cash infusions or include conditional lenders such as a swap counterparty or a letter of credit provider. This level of complexity requires that your chosen Depositary Bank and Collateral Agent understand how these phases affect the cash flow and assignment of collateral to the Secured Parties.

MAKING YOUR CHOICE

When it comes to choosing a Depositary Bank and Collateral Agent that will successfully administer your project finance transaction, look for institutions that understand the structure of your deal and its corresponding responsibilities based on the project agreement and any ancillary agreements to which they are signatories.

There are many challenges to any large project/transaction—knowing what to look for, and hiring the Depositary Bank and Collateral Agent that are right for your project can be instrumental to its success.

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