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Quantify the NPV benefit of refinancing existing project debt
Enter current and proposed loan terms
Typical: 120bps margin, 15yr tenor
0.5% of loan amount
Market range: 100-140bps
Annual Debt Service Savings
+$2.2M
first year
Total Upfront Costs
-$2.8M
penalty + fees
NPV Benefit
+$15.6M
net present value
Break-even
1.4 yrs
discounted payback
Prepayment Penalty
$2.2M
2% of debt
Legal Fees
$54k
Arrangement Fee
$540k
50bps of debt
Total Transaction Costs
$594k
Refinancing makes sense if penalty < 16.47%
Full debt service (principal + interest) under both loan terms
| Year | Current DS | New DS | Savings | Cum. Savings | PV Savings | Cum. NPV |
|---|---|---|---|---|---|---|
| 0 | - | - | -$2.8M | -$2.8M | -$2.8M | -$2.8M |
| 1 | $13.0M | $10.8M | +$2.2M | $-561k | $2.1M | $-685k |
| 2 | $13.0M | $10.8M | +$2.2M | +$1.6M | $2.0M | +$1.3M |
| 3 | $13.0M | $10.8M | +$2.2M | +$3.8M | $1.8M | +$3.1M |
| 4 | $13.0M | $10.8M | +$2.2M | +$6.0M | $1.7M | +$4.8M |
| 5 | $13.0M | $10.8M | +$2.2M | +$8.2M | $1.6M | +$6.5M |
| 6 | $13.0M | $10.8M | +$2.2M | +$10.4M | $1.5M | +$8.0M |
| 7 | $13.0M | $10.8M | +$2.2M | +$12.6M | $1.5M | +$9.5M |
| 8 | $13.0M | $10.8M | +$2.2M | +$14.8M | $1.4M | +$10.9M |
| 9 | $13.0M | $10.8M | +$2.2M | +$17.0M | $1.3M | +$12.2M |
| 10 | $13.0M | $10.8M | +$2.2M | +$19.2M | $1.2M | +$13.4M |
| 11 | $13.0M | $10.8M | +$2.2M | +$21.4M | $1.2M | +$14.5M |
| 12 | $13.0M | $10.8M | +$2.2M | +$23.6M | $1.1M | +$15.6M |
| Total | $143,918,172 | $119,550,717 | +$24,367,455 | - | - | +$14,474,412 |
DS = Debt Service (principal + interest), PV = Present Value, Cum. = Cumulative