2.1.2.9 Line of Credit
A Line of Credit is a revolving credit facility that automatically covers temporary liquidity shortfalls. Whenever the cash flow of a period (after operations, debt service and reserve-account movements) is negative, the line is drawn up to its limit; surplus cash in later periods automatically repays the drawn balance. Only a shortfall that exceeds the available limit remains visible as a Liquidity Gap.
Input Field | Description |
|---|---|
Driver | Determines the facility limit: Fix – fixed amount; Power – value per unit of installed power, scaled with plant capacity; Debt Service – percentage of the debt service of the upcoming months. |
Value | Amount (Fix), amount per power unit (Power) or percentage (Debt Service). |
Look Ahead Period | Only for the Debt Service driver: number of future months whose debt service defines the limit. |
Related Debt | Only for the Debt Service driver: which debts the limit refers to (all or a selection). |
Start / End | Availability window. Outside it the balance is 0 and no fees accrue. |
Usage | Free Cashflow, Debt Service & Reserves – covers the full shortfall; Debt Service – drawings limited to the period's debt service; None – never drawn, only the commitment fee accrues. |
Interest | Rate charged on the drawn balance (fixed or linked to an interest base rate). |
Fee | Commitment fee on the undrawn portion (limit minus drawn balance). |
Interest Payment Method | Payment frequency and timing of interest and fees. |
Mechanics
Drawdown: Balance(i) = max(Shortfall(i) + Balance(i−1), −Limit(i))
Repayment: Balance(i) = min(Balance(i−1) + Surplus(i), 0)
The balance is shown as a liability on the balance sheet. If several Lines of Credit are defined, they are drawn in their configured order; each subsequent line only covers the shortfall not already covered by the previous ones.