Soft Mini Perm Financing | Practical Law
Soft Mini Perm Financing
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Soft Mini Perm Financing
Practical Law Glossary Item 1-500-2215
(Approx. 2 pages)
Glossary
Soft Mini Perm Financing
A type of
mini perm financing
that, if not refinanced by the maturity date, becomes subject to more onerous financial terms including:
An increase in the
margin
on the loans.
Most, if not all, of the project's
excess cash flow
must be used to pay down the principal amount of the loans.
A prohibition on distributions to the project sponsors.
Borrowers and project sponsors prefer this structure over a
hard mini perm financing
which triggers an
event of default
if not paid by the maturity date.
For more information on these issues, see
Practice Notes, Project Finance: Overview
,
Project Finance: Sources of Available Financing
and
Financial Covenants: Project Finance Transactions
, and
Project Finance Waterfall Provision Flowchart
.
For more information on financing sources available to repay these loans, see
Practice Notes, Sources of Available Project Financing: Term Loan B Facilities
and
Sources of Available Project Financing: Project Bonds
.