What is back-leverage financing?

Back-leverage financing is sometimes closed before or simultaneously with the tax equity financing, but it is also flexible enough to be added at a later date. Unlike tax equity, back-leverage financing can be added to projects that started commercial operation years ago.

What is a back leveraged transaction?

In a back leveraged transaction,the sponsors' lenders are structurally subordinated to the project company's lenders. If distributions to the sponsor are suspended for any reason (for example, because of an event of default or a cash sweep ), the sponsor may not have the cash necessary to meet its obligations under the loan.

Why are back-leverage restrictions important?

These restrictions are important for back-leverage lenders because they are usually triggered by foreclosure on equity interests in the tax equity partnership, or foreclosure on interests in the back-leverage borrower.

What is leverage?

Leverage means the aggregate amount of indebtedness of the Company for money borrowed (including purchase money mortgage loans) outstanding at any time, both secured and unsecured.