TY - JOUR T1 - Restructuring Merchant Power Project Financings JF - The Journal of Structured Finance SP - 42 LP - 47 DO - 10.3905/jsf.2004.320327 VL - 9 IS - 4 AU - Jeff Bodington Y1 - 2004/01/31 UR - https://pm-research.com/content/9/4/42.abstract N2 - While most of the electric generating capacity in the United States is operating well and meeting its participants' expectations, the amount of capacity in some state of financial distress is unprecedented. Restructuring the debts of these troubled facilities demands careful evaluation, many difficult decisions, and is an exciting opportunity for finance professionals. The origins of distress are the foundation for a restructuring and provide a guide to avoiding trouble in future financings. The causes of distress fall into six broad categories: markets, participants, facilities, operations, agreements, and financials. Analysis of these categories is an effective first step in a restructuring. A successful debt restructuring depends on many accounting, legal, and other factors. Subject to that qualification, most of the ultimate recovery for projects already restructured and those on the horizon depends on resolution of four important and interrelated issues: the waterfall, reserves, interest drag, and debt capacity. ER -