Title XI Financial Advisors Statement of Work.docx

STATEMENT OF WORK

FOR

TITLE XI PROGRAM ADVISORY SERVICES

A. PURPOSE

The Maritime Administration (MARAD) intends to issue Blanket Purchase Agreements (BPA) to provide assistance to the Title XI Program. The selected firms will assist the DOT to evaluate applications for Federal credit assistance.

MARAD seeks a well-qualified firm with significant project finance expertise in the municipal bond, corporate bond, and commercial banking sectors, as well as specific experience in project financings resulting from public-private partnerships.(Specialized experience with large commercial loan risk review and approval is preferred.)

The number of task orders issued will depend on the demand for Federal credit assistance. Generally, most upcoming credit transactions will result in task orders for financial advisors. In addition, MARAD may issue task orders for research and other special advisory services to assist in carrying out Title XI program requirements.

B. BACKGROUND

Title XI Guaranteed Loan Program

Administered by MARAD, Title XI provides a full faith and credit guarantee by the U.S. Government of debt obligations issued by (1) U.S. or foreign ship owners for the purpose of financing or refinancing either U.S. flag vessels or eligible export vessels constructed, reconstructed, or reconditioned in U.S. shipyards; and (2) U.S. shipyards for the purpose of financing advanced shipbuilding technology and modern shipbuilding technology (Technology) of a privately owned general shipyard facility located in the United States. Additional information about the Title XI program may be found on the Internet: www.marad.dot.gov/titleXI/.

C. CONTRACTOR TASKS

I. In accordance with the terms of this BPA and specific task orders awarded, the contractor will assist MARAD to evaluate and negotiate proposed credit transactions. Specific tasks for the financial advisor may include, but are not limited to:

1) Evaluating the economic soundness of the project and creditworthiness of the applicant for credit assistance. This evaluation will include analyzing (a) the financial viability of the project, including the plan of finance (capitalization plan) and assumptions therein; (b) the financial condition of the borrower and other relevant parties, (c) the past performance and future ability to meet all repayment obligations, and (d) project risks, including reasonableness of the revenue and expense forecasts, and project schedule and costs.

2) Analyzing the historic financial performance of the borrower, including balance sheets, income statements, cash flows, and footnotes to audited financial statements, to determine strengths, weaknesses, and trends and generate projected financial statements.

3) Performing detailed financial calculations and establishing ratios related to the overall financial structure of the transaction, previous financial experience, and industry comparisons. These calculations may include measures of profitability, liquidity, and financial strength, such as coverage ratios, debt capacity, alternative repayment structures, sensitivity analysis, stress testing and other financial tests.

4) Assessing the strengths and weaknesses of the borrower’s management.

5) Reviewing and evaluating the feasibility studies for the project.

6) Evaluating the proposed market for the project, including a review of applicable market studies/surveys, the borrower’s relationship with its major customers and the projected needs met by the project, and the project’s suitability for the intended market.

7) Reviewing and evaluating the proposed ownership structure of the transaction.

8) Preparing amortization schedules for the proposed credit facility that also show the debt service coverage.

9) At the direction of MARAD staff, assisting in credit agreement negotiations with the borrower, including performing financial analysis in support of the negotiations and assisting in negotiating the terms of the credit agreement and other documents to be executed by the credit applicant.

10) Attend working conferences and meetings at MARAD headquarters in Washington, D.C., as well as participate in telephone conference calls, as needed. The selected contractor must be prepared to attend meetings on short notice.

11) Submit a final report to MARAD on the financial evaluation of the application, including recommendations (and suggested modifications, if applicable) on the proposed structure of the transaction, potential alternative structures for the financial plan and terms/conditions of the credit instrument. Worksheets, including computer models, supporting the financial analysis must be maintained and available for MARAD review.

12) Present final results of the financial evaluation in two or more meetings to MARAD and DOT staff in Washington, DC.