A deep dive into Funding Structures -- Basic to Complex
In this module we explore the capital markets side of investment banking. Debt, equity and hybrid instruments are a major component of deal success and are central to project finance, leveraged buyouts and scaling a business through its lifecycle.
Formulating the optimal capital stack requires an understanding of the mechanics of dilution and the evaluation of term sheets — which we will cover in detail in this module.
Common Debt Structures in Project Finance
We model out several common debt structures in project finance, using a gas-fired power plant as an example asset.
These structures apply to data centers, wind and solar facilities.
How Asset Heavy Companies are Capitalized
We do a deep dive into the various ways asset heavy (power, in this case) companies are capitalized, focusing on (i) private perpetual capital vehicles, (ii) C-Corp IPPs, (iii) PE/Infra funds and (iv) YieldCos.
You will gain an exhaustive understanding of how the HoldCo layer of the capital structure of these corporate forms are structured, setting the ground work for a deeper dive into the SPV (project) level capital stack, central to the project finance model.
The Project Finance Capital Stack
This is where we break out the mechanics of funding (i) development and (ii) construction of an asset through to its operational/cash flowing status.
We will track the capital stack, risk/return and associated modeling mechanics through each of these stages of the project lifecycle.
YieldCos vs. Private Perpetual Vehicles - A Data Center Perspective
We evaluate the YieldCo (or REIT) vs. Private Perpetual capitalization models and analyze which structure could be more advantageous to the capital formation taking place backing the data center/AI compute boom.
Funding Capex without Dilution
We will cover how company equity is often diluted throughout its lifecycle - and discuss means of funding growth that avoids dilution, weighing the pros and cons of both.