Lenders making back-levered term loans to wind and solar projects focus on tax equity terms that impact their access to project cash flows and ability to foreclose.
Key Points:
..Most operating period term loans to US wind and solar projects are back-levered to tax equity investments.
..Back-levered lenders need to understand the terms of the project’s tax equity investment and how they impact the lenders’ access to project cash flows and ability to foreclose.
..Back-levered lenders often require a consent to assignment from the tax equity investor to address provisions in the tax equity documents.
..Sponsors intending to obtain back leverage should consider including customary protections for back-levered lenders in their tax equity documents.
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