Financing a Bridge?
hey guys. I'm trying to build an excel model to figure out how to finance the construction of a bridge.
Pretty standard background info: I've got a set of cash flows for the bridge: the construction period is spread over 3 years, it pays annual toll revenues growing at a fixed rate, has growing operating costs, operational for 20 years, etc.
To finance it, I've got $50 million in equity that must be invested in the bridge, and I can use a bank loan (with a variety of specific covenants) and issue bonds (pay semi annual interest payments of 2.4% per annum, credit spread of 200 bps).
If I want to determine the optimal amount of bank loan and bonds to finance this project, what should my approach be? Where should I start?