Key Considerations for Back-Leverage Financings of Renewable Energy Projects

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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.

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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