ABSTRACT
Macro-engineering projects represent just about the ultimate challenge to investment bankers. Common to most of these projects is the need for a relatively large amount of capital over a short period of time. Increased leverage--raising the proportion of debt in relation to stockholder investment--has been a big part of their solution to declining productivity and inflation. The investment banker must attempt to see that all of the risks have been addressed in the feasibility studies for the project and in the papers prepared for the lenders. Financing of projects can be divided into two basic types, non-recourse and credit-supported. One consideration is the financing capacity of the country in relation to the needs of the project. The most obvious source of interim financing would be a revolving credit facility from a commercial bank or syndicate of commercial banks. Some non-traditional sources of interim financing can at times lead to a more advantageous overall financing plan.
