The First Capital Finance funding/loans are structured with a high degree of flexibility to provide funding/loan profiles that match client and project needs. This approach determines each loan currency and interest rate formula.

The basis for a loan is the expected cash flow of the project and the ability of the client to repay the loan over the agreed period. The credit risk can be taken entirely by the First Capital Finance or may be partly syndicated to the market. A loan may be secured by a surety bond or borrower's assets and it may be converted into shares or be equity-linked. Full details are negotiated with the client on a case-by-case basis.

Loan features
Minimum $1 - 500 million, although this can be smaller in some cases.
-Fixed or floating rate.
-Senior, subordinated, mezzanine or convertible debt.
-Denominated in major foreign or local currencies.
-Short to long-term maturities, from 5 to 15 years.
-Project-specific grace periods may be incorporated.

Interest rates:
First Capital Finance funding/loans are based on current market rates and are priced competitively. Following a successful enquiry and once a project has been presented to the First Capital Finance, financial terms can be discussed in detail with First Capital Finance staff. The First Capital Finance offers both fixed and floating interest rates: Fixed rate basis, linked to a floating rate such as LIBOR. Floating rate basis with a cap or a collar. As the type rate directly affects profitability, a project's financial structure should preferably include both floating and fixed rate loans. The mix is evaluated with respect to client and project sensitivities to interest rate movements.

Other lending terms:
Full lending terms are negotiated with the client for each project.
Recourse to a sponsor is not required. However, the First Capital Finance may seek specific performance and completion guarantees plus other forms of support from sponsors of the kind that are normal practice in limited-recourse financing.

The Bank requires project companies to obtain insurance against normally insurable risks. Examples include theft of assets, outbreak of fire, specific construction risks. The First Capital Finance does not require insurance against political risk or non-convertibility of the local currency.

The First Capital Finance usually requires the companies it finances to secure the loan with surety bond or project assets. These can include:
-Mortgage on fixed assets, such as land, plant and other buildings.
-Mortgage on movable assets, such as equipment, other business assets.
-Assignment of the company's hard currency and domestic currency earnings.
Typical project finance covenants are required as part of the loan package. Such covenants, limiting indebtedness and specifying certain financial ratios and various other issues, will be negotiated.

Businesses looking to obtain loans or projects seeking funding through us
should provide:
- Sound business plans for establishing or expanding a company's business.
- Solid management with a proven track record.
- Information on owners/partners.
- Financial history.
- Security in the form of surety bond, mortgages, etc.
- Funds provided must be used in strict accordance with the aims stated in the original business plan.
- In line with the First Capital Finance's mandate, First Capital Finance ensure that all proposals pay due regard to environmental issues.
- Funding cannot be provided to majority state-owned companies or for government-guaranteed projects.

Equity:
We invest equity ranging from $2 million - $599 million in industry, infrastructure, and the financial sector.

The First Capital Finance uses innovative approaches and instruments and expects an appropriate return on investment. We will only take minority positions and will have a clear exit strategy.

Equity and quasi-equity instruments
-Ordinary shares.
-Preference shares.
-Subordinated loans.
-Debentures.
-Income notes.
-Redeemable preference shares.
-Listed and unlisted.
- Underwriting of share issues by public or privately-owned enterprises.
- Financing the transfer of shares in existing enterprises; This form is only used in cases of privatisation where such a transfer will definitely improve efficiency, for example, through better management, rehabilitation or expansion under new ownership or synergy with the acquirer's operations.
- Other forms can be discussed with First Capital Finance investment manager.

The First Capital Finance also participates in investment funds, which in turn invest in medium-sized companies that need to expand their business. Equity funds are focused on a specific region, country or industry sector, have local presences and are run by professional venture capitalists. Their main investment criteria are consistent with the First Capital Finance's overall investment policy.

Terms and conditions
The terms and conditions of First Capital Finance investment depend on risks and prospective returns associated with each project. They are also affected by the financial/ownership structure of the project company.