Does the OPIC guaranteed financing need to be fully repaid before any return of capital to equity investors?
OPIC can allow for equity investors to receive distributions on a pro rata basis with OPIC, under a “Waterfall” formula generally described below. Proceeds from exited investments may be used in the following general priority in the earlier years of the fund: • to pay expenses of the fund; • to provide for reserves for future fund expenses; • to fund investments; • to make tax distributions to equity investors; and, • to make payments on OPIC-guaranteed loans along with applicable premiums. After providing for the foregoing, an OPIC-supported fund may, during the early years of a fund’s life (typically, the first seven years of a ten year fund), make concurrent distributions to equity and debt participants in a fund, on a pro rata basis, as long as a negotiated prescribed debt to equity ratio is maintained. During the later years of a fund’s life, and to the extent that OPIC-guaranteed loans and interest have not been satisfied, distributions are generally required first to be made to
OPIC can allow for equity investors to receive distributions on a pro rata basis with OPIC, under a “Waterfall” formula generally described below. Proceeds from exited investments may be used in the following general priority in the earlier years of the fund: a) to pay expenses of the fund; b) to provide for reserves for future fund expenses; c) to fund investments; d) to make tax distributions to equity investors; and, e) to make payments on OPIC-guaranteed loans along with applicable premiums. After providing for the foregoing, an OPIC-supported fund may, during the early years of a fund’s life (typically, the first seven years of a ten-year fund), make concurrent distributions to equity and debt participants in a fund, on a pro rata basis, as long as a negotiated prescribed debt to equity ratio is maintained. During the later years of a fund’s life, and to the extent that OPIC-guaranteed loans and interest have not been satisfied, distributions are generally required first to be mad
Related Questions
- To raise equity capital - how much of a company would need to be sold to investors? What type of return do investors look for?
- Does the OPIC guaranteed financing need to be fully repaid before any return of capital to equity investors?
- How does the company measure the required rates of return of investors or the opportunity cost of capital?
