Marcfields-Capital Management corporate doctrine is solely concentrated on three core principles: Management, Analysis, and Research for the fostering and preservation of financial and social returns. We enable the likelihood of funding a particular deal or transaction with the most appropriate source of capital at reasonable and acceptable terms. Business owners at start-ups and middle-market companies face tight market timing pressures when building new ventures or managing operations with the risk and uncertainty of raising private capital. We work with you to minimize the risk, and uncertainty associated with the complexity of funding new and emerging middle-market ventures. In this world of cyclical economic change and adjustment of fiduciary commitments, the simple concept of corporate opportunity lies on three general objectives as the determination to whether such opportunity belongs to a corporation rather than to a delegate within an organization: the line of business; the interest or expectancy; and the equal opportunity.
PROJECT FINANCE/IMPACT INVESTMENT
- Sectors: Agricultural Value Chain. Biomass waste-to-value. Concentrated Solar (CSP). Energy Efficiency. Green Hydrogen & Fuel Cells. Geothermal. Hydroelectricity. Landfill Gas. Microgrids. MRF – materials recovery facilities. Nature-based Climate Solutions. OTEC – ocean thermal energy conversion. Real Estate — master-planned communities, commercial, mixed-use, affordable/green housing. Regeneration of Soils and “Climate Smart” Agriculture and sustainable food systems. Solar, Ground Mount (utility-scale), another Solar/PV, Solar Thermal. Storage – Battery (such as Battery Energy Storage Systems or BESS, for grid stabilization). Storage – Compressed Air. Storage – Mechanical or Thermal (such as molten salt). Storage – Pumped Hydro. Tidal Power, or Wave Power (hydrokinetic). Transmission Line – AC. Transmission Line – HVDC. Waste materials recovery. Waste-to-Energy or Waste-to-Value — pyrolysis, gasification, biogas/AD. Water Distribution. Water Reclamation, Filtration, Production / Conservation. Wastewater Treatment. Wind Power — onshore/offshore, floating. Other types of cleantech infrastructure such as energy-efficient (LED) Lighting as a Service. Sustainable Manufacturing, Transportation, Healthcare, Medical Spas, Natural Medicines
- Debt-to-equity ratio: 100% of the project budget can be financed. No new cash (“unexpended funds”) need necessarily be invested by the developers or sponsors when using a capital guarantee
- Stage of project: Does not need to be shovel-ready (if some additional development steps are needed before construction, that may be fine). All the various uses of funds must be properly disclosed, verified, and fall within standard guidelines.
- Size range: Minimum $25 million. Maximum $4 billion. Note that larger portfolios typically take longer to close.
- BG/SBLC/APN Coverage: 70-80% (may be 60% in some cases)
- Loan term, type, and tenor: non-recourse (by collateral), 3% APR fixed, if the bank issuing the capital guarantee is rated as one of the top 200 banks in the world. Lower-tier banks may result in a slightly higher APR.
- Loan length (tenor) can be 4-20 years . Note: APR is fixed and does not vary with length of the loan. Repay in full at any time before maturity date without penalty.
- Asset class is most like mezzanine or subordinated debt with an equity kicker. There is no senior debt required or used — thus no lien against operating assets.
- Minority carried interest (equity stake) requested for the life of the project with an adequate capital guarantee.
PROJECT FINANCE/IMPACT INVESTMENT
- Equity interest: A minority equity stake in the SPV based the rating of the instrument and bank used, amount of preparation required from our side, and the role you wish us to play (such as whether we’re involved in asset construction or O&M), years of coverage for a *Bank Guarantee (see below), and whether you require 100% financing and/or early-stage development financing. This is negotiated on a case-by-case basis thus difficult to predict. We strive to leave as much of the “retained earnings” as possible for the company to grow and succeed. The investment is effectively a “hybrid” of debt and equity and what’s typical is 15-40% equity with full BG/SBLC or Availed Promissory Note coverage during construction, but that is a topic for discussion upon completion of due diligence.
- Timing to receive funds: Closing within 30 days and first funds arrive within 30-45 days after closing. Closing follows quickly after receipt of the Bank Guarantee hard copy (first sent via SWIFT MT-760 with bank RWA letter) or Availed Promissory Note (APN) or Sovereign Guarantee hard copy sent via courier.
- Draw schedule: Funding is provided in stages, per a published and agreed-upon monthly draw schedule, to complete any remaining development, then procurement, asset construction and commissioning.
*Summary of our current Capital Guarantee best practices:
Plan A: Staged Guarantees : Issue the Bank guarantee in stages – enough $ or € to get the project moving, then subsequent tranche(s) to finish and reach COD. Consider the cashflow requirements of the project as such staging does slow down the available draw schedule. That may be the only constraint or limitation of this approach.
Plan B: Guarantee Leverage: Issue a partial guarantee for the entire project (as low as 30% LTV) to build a more solid foundation of cash-backed assets and profit streams in the longer run, which can then be leveraged for financing subsequent projects. The developer would be asked to provide a much higher % of equity carried interest (possibly the majority, if the LTV coverage is below 50%), so we’ll need to either set that expectation and/or propose to form a JV with clients.
For this to work, the developer/owner would typically be trying to get themselves established (first project at scale in the industry or with the technical pathway), making initial projects somewhat sacrificial lambs in terms of their own piece of the carried interest pie.
Marcfields - Capital Management 