The T-REX Loan Sizing tool can be used within Energy Project Finance deals. This tool allows solar project developers, lenders, rating agencies, and other parties involved in the transaction process to structure and size loans based on target Debt Service Coverage Ratios (DSCR) under any defined Scenario.
How the Loan Sizing Tool is Used:
Previously, T-REX users could sculpt Principal Payment Cash Flows on a loan by providing the loan’s balance and using our Sculpted Principal Payment method. While this functionality is still supported, users can also now provide the DSCR and other associated loan terms all as inputs, and the T-REX system will generate the loan’s balance and payment schedule--either Principal or Principal and Interest combined, as outputs. This functionality, which will automatically solve for the loan’s balance and payment schedule based on a multitude of other inputs, allows users to quickly and easily size and structure loans that are backed by Solar Project Cash Flows.
Detailed Functionality Description
Before sizing the loan, input your Solar Project information in the Project Editor and structure any Scenarios you wish to analyze. Once the Project Data is saved and the Scenarios are constructed, the loan (which will use the Project Cash Flows) is ready to be sized.
The loan sizing functionality is located in a new Loan Sizing tab in the Loan Editor:
In this tab, the user can select a Scenario under which the loan will be sized. For example, to size a loan to a P90 generation level, create a Scenario for your P90 analysis and then select it in the Scenario drop down in the Loan Sizing tab.
Next, choose to Solve for either the Total Principal and Interest Payment schedule in Scheduled Payments, or Only the Principal Payment schedule in Scheduled Principal, that meets the other requirements under the given the Scenario.
After entering the DSCR target, the target Interest Rate (or margin if it is a floating rate loan), and the target loan term, the user can size the loan by clicking the Size button. Clicking this button will generate the loan’s balance and either the schedule of Principal Payments, or Principal and Interest Payments (depending on the selection in the Size For field), that meet all of the user-defined criteria under the given Scenario. To apply the results to that loan for further cash flow analysis in the Reports section, click Apply to Loan.