HoldCo Financing – Trends, Key Features And Issues

The purpose of this Note is to set out the recent trends, key features and issues in relation to HoldCo Financings in the Irish market. "HoldCo Financing" is the provision of loan facilities to a holding company ("HoldCo"), which sits above an operational company or group of companies ("OpCo Group") and which has secured senior debt at the operational group level ("Senior Debt").

1               Recent Trends

1.1           Traditionally, HoldCo Financing has been a common feature of infrastructure and energy projects where the OpCo Group has a revenue stream which can be relatively accurately forecasted (and, as a result, the distributions that will be made available to the HoldCo can also, to a large degree, be accurately forecasted). However, recently we have seen a number of commercial banks and alternative investment providers making facilities of this nature available to strong cash generating OpCo Groups.