- Lock in a fixed interest rate for up to 30 years
- Non-recourse financing
- High amounts of financing based on verified asset valuations
- Transparent funding process
- Financing may be public or private depending upon a client's wishes
- No personal guarantees
- Lenient cross collateralization requirements compared to bank loans
- More forgiving default provisions than bank loans
Nola Capital Corporation
Bond financing is a form of debt financing that has been around for centuries. The world's bond markets are many times
larger than all the stock markets in the world combined. Bond financing provides capital for projects where the owner seeks
non-dilutive financing in order to realize the potential of a project but also wants less restrictive terms than can currently be
obtained from traditional bank loans.
Unlike typical bank financing, all of the client's corporate assets may not have to be cross collateralized ONLY the assets in
the specific bond financing are collateralized. Default covenants, special requirements, etc. are also more lenient in bond
The term of the bonds is flexible depending upon what works best for the client. The bonds are typically rated by Standard
& Poor's, Moody's or Fitch and are sold to hedge funds, banks, private investors, trusts and other institutional buyers. The
bonds may have provisions that allow them to be retired early if the client chooses to do so.
The project must be well documented and the minimum size bond financing is normally $20 Million with no practical upper
limit if the project qualifies.
A client may use bond financing proceeds for acquisitions, development, paying off existing debt, buying out partners,
expanding into new lines of business, etc.
The coupon on bonds is locked in so a client does not have to worry about future interest rate increases. In some cases a
payment holiday for the coupon may be arranged in order to give a client sufficient time to generate adequate cash flow.
All projects must have a sufficient amount of equity invested in them and a sufficient amount of fixed assets. Asset
valuations are verified with reputable third parties such as engineering firms, investment banks, etc. In some cases, a
large amount of excess assets can reduce the equity requirements. Contracts such as a high quality Power Purchase
Agreement (PPA) or Off-Take Agreement may also reduce the equity requirements.
Rates are at an historic low. Please contact us and we will be glad to answer your questions.
Long Term, Fixed Rate Corporate Bond Financing
If you have a high quality project with substantial assets but are short of capital, bond financing is an alternative to
traditional bank loan financing.
A bond is an instrument of indebtedness of the bond issuer to the holders. It is a debt security under which the issuer owes
the holders a debt and is obliged to pay them interest (the coupon) and/or to repay the principal at a later date, termed the
maturity. In bond financing, a client is selling its bonds to outside investors in order to raise debt capital instead of
borrowing debt capital from a bank or other lender. In either case, debt is being incurred. However, the primary difference
is bond financing is more flexible than bank financing and may be far superior in the event a company is looking for a
method to avoid oppressive cross collateralization requirements.
- Oil & Gas
- Renewable Energy
- Waste to Energy
- Information Technology