Course Content
Lenders are structurally subordinated to tax equity. In cases of asset underperformance, tax equity may sweep additional cashflow, leaving lenders in default positions. Adding to that, many sponsor models don’t accurately model the impact on lenders from downside cases. If lenders don’t understand how tax equity works, reasonable downside cases can’t be assessed.
This course, designed for originators and portfolio managers at lending institutions, aims to demystify tax equity models. Gain an understanding of the structure of transactions, how tax equity is sized (and thus their risks), the key elements in a tax equity model, and how to assess risk from a lender’s standpoint.
At the end of this course, you’ll be able to:
- Understand the different tax equity structures in the market (traditional, hybrid, preferred equity, transfers)
- To effectively read the tax equity and hybrid elements of a financial model
- Identify the main risks to lenders in a tax equity transaction
- Understand if the downside sensitivities in the model are correct
- Be able to quantify risks (e.g. the cash sweep amount and duration)
- Have a path forward to broader understanding and approaches to sensitivities within your group
- Individuals can sign up to this live course (over 4×2.5-hour sessions