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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
+€2.0M
first year
Total Upfront Costs
-€2.5M
penalty + fees
NPV Benefit
+€14.5M
net present value
Break-even
1.3 yrs
discounted payback
Prepayment Penalty
€2.0M
2% of debt
Legal Fees
€50k
Arrangement Fee
€500k
50bps of debt
Total Transaction Costs
€550k
Refinancing makes sense if penalty < 16.51%
Full debt service (principal + interest) under both loan terms
| Year | Current DS | New DS | Savings | Cum. Savings | PV Savings | Cum. NPV |
|---|---|---|---|---|---|---|
| 0 | - | - | -€2.5M | -€2.5M | -€2.5M | -€2.5M |
| 1 | €11.5M | €9.4M | +€2.0M | €-516k | €1.9M | €-631k |
| 2 | €11.5M | €9.4M | +€2.0M | +€1.5M | €1.8M | +€1.2M |
| 3 | €11.5M | €9.4M | +€2.0M | +€3.6M | €1.7M | +€2.9M |
| 4 | €11.5M | €9.4M | +€2.0M | +€5.6M | €1.6M | +€4.5M |
| 5 | €11.5M | €9.4M | +€2.0M | +€7.6M | €1.5M | +€6.0M |
| 6 | €11.5M | €9.4M | +€2.0M | +€9.7M | €1.4M | +€7.5M |
| 7 | €11.5M | €9.4M | +€2.0M | +€11.7M | €1.4M | +€8.8M |
| 8 | €11.5M | €9.4M | +€2.0M | +€13.7M | €1.3M | +€10.1M |
| 9 | €11.5M | €9.4M | +€2.0M | +€15.8M | €1.2M | +€11.3M |
| 10 | €11.5M | €9.4M | +€2.0M | +€17.8M | €1.1M | +€12.4M |
| 11 | €11.5M | €9.4M | +€2.0M | +€19.8M | €1.1M | +€13.5M |
| 12 | €11.5M | €9.4M | +€2.0M | +€21.9M | €1.0M | +€14.5M |
| Total | €137,690,868 | €113,278,271 | +€24,412,597 | - | - | +€14,505,950 |
DS = Debt Service (principal + interest), PV = Present Value, Cum. = Cumulative