DFC offers two main debt financing products—direct loans and partial loan guaranties. Terms and conditions vary by transaction but the basic parameters are as follows:
Tenor
The loan or guaranty tenor is typically between five and 25 years, with a maximum of 30 years, depending on the type of project and its debt servicing capability. For loans, it is common to allow a grace period on principal repayment at the beginning of the term, however each transaction will be evaluated on a case-by-case basis. DFC can tailor flexible disbursement and amortization, although our most common repayment schedules are quarterly or semi-annual.
Loan Size
DFC guaranty and loan sizes ranges from $1 million to $1 billion. Sub-loans under guaranties can be much smaller. DFC also works with co-lenders and co-guarantors to bring sufficient resources to larger projects and to increase the development impact of the transaction.
Costs
Interest and fees will vary depending on the project. A summary of key costs is presented below. Please consult with your DFC finance officer for more information.
- Upfront Retainer Fee covers due diligence costs such as travel to the project site
- Facility/Origination Fee a one-time, flat fee usually paid at the time of loan agreement signing or first disbursement
- Commitment Fee an annual percentage charged on any undisbursed amount
- Utilization Fee a bi-annual fee charged on outstanding principal under guaranty coverage
- Interest Rate a negotiated spread over the base-cost of funds
- Maintenance Fee an annual fee charged to cover the cost of monitoring the loan
- Other fees related to the cost of the services of outside consultants or attorneys that may be required by DFC, related funding costs, and any expenses related to registration or notarization of documents
Process
DFC processes transactions as quickly as all parties are able to complete the necessary procedures and documentation.