The general objectives of Subordination of Debt in Project Finance transactions are to mitigate risk for senior lenders and mobilize a higher aggregate level of Project debt than is otherwise justified by the underlying cash flows. Subordination accomplishes both purposes by establishing two classes of debt in the financing plan and two classes of lenders – a senior lender and a subordinated layer – each with a different risk reward trade off.

Structured finance to achieve client objectives such as cost reduction, risk mitigation and balance sheet    management (e.g. receivables-based financing)

Defining Subordinated lenders rights and obligations relative to the project and senior lender, as well its    relative rights to security.

The ability of the subordinated lender to participate with the senior lender in amending, modifying or
    waiving any term and condition embedded in the financing documents.

KarpeDium has established and implemented construction administration support services for financial institutions and real estate/property buyers, sellers, investors and managers. These uniform procedures ensure that a construction/development loan is properly evaluated prior to approval, and thoroughly monitored during construction, to meet the lending guidelines of each institution and investor and enable them to maximize their return on investment. Construction administration procedures also assure compliance with state laws.

Prior to loan approval, KarpeDium will perform a comprehensive analysis of the project budget, contracts, plans/specifications and time line for completion. This information, in conjunction with project feasibility and the credit analysis, is essential in the loan underwriting process. Once the loan is approved and closed, consistent forms, thorough inspections and stringent lien waiver policies are utilized. This controls the construction and requisition process, thereby assuring the project's completion in a manner consistent with the terms and conditions of the loan documents.

The project Agreements constitute the core of any Project Financing. We help our clients in laying the contractual foundation of project agreements including the concession and Off take agreement around which all contracts revolve. We help in analyzing key technical, commercial and economic understandings related to the Project such that we can allocate obligations and associated risks to the project vehicle or its counter parties in a legally enforceable manner.

A financial Model contains all the informational elements and assumptions needed to project the financial statements, including the balance sheet, income statement and cash flow statement. It helps provide context within which go/no-go decisions, implementation strategy, or conflicts with internal corporate policies can be addressed and rationalized by the Project Team

Our consultants at KarpeDium are adept at creating financial models for both sponsor’s and lenders that process a comprehensive list of input assumptions and provide outputs that reflect the anticipated real life interaction between data and projected cash flow values of particular projects. We assist corporate decision makers in deciding on projects competing for resources, arranging joint ventures and local partners.

As part of the KarpeDium holistic risk management method, we work with the client to develop a framework that is within the client's specific project and/or contract constraints, breaking down all risks and exposures into addressable and manageable components. Using this approach, KarpeDium can provide the client with the assurance of a complete risk management assessment. To assist you with your initial risk management planning process, the following is a listing of many construction industry risks and exposures, delineated into the categories of: Financial, Contractual, Operational, Organizational and Insurable Risks.