compare_financing_scenarios: Compare three financing structures on a common Discounted...
In cre.dcf: Discounted Cash Flow Tools for Commercial Real Estate

compare_financing_scenarios

R Documentation

Compare three financing structures on a common Discounted Cash Flow (DCF) base

Description

Build and compare three financing setups for a given unlevered DCF:

an all-equity case,
a bullet debt structure,
an amortizing debt structure.

All three scenarios share the same acquisition base, interest rate, maturity and target LTV. The function returns a summary table of key investment and credit metrics, together with detailed objects for each scenario.

Usage

compare_financing_scenarios(
  dcf_res,
  acq_price,
  ltv,
  rate,
  maturity,
  arrangement_fee_pct = 0,
  capitalized_fees = FALSE,
  covenants = list(dscr_min = 1.25, ltv_max = 0.65)
)

Arguments

`dcf_res`	List; result of `dcf_calculate()` for the unlevered project. It is assumed to contain the cash-flow table and the input exit yield in `dcf_res$inputs$exit_yield`.
`acq_price`	Numeric scalar; acquisition base consistent with the pricing convention used in `dcf_res` (for example HT, DI or value).
`ltv`	Numeric scalar in `[0, 1)`; target loan-to-value ratio at origination.
`rate`	Numeric scalar in `[0, 1]`; annual interest rate used to build the debt schedules.
`maturity`	Integer scalar greater than or equal to 1; debt maturity in years.
`arrangement_fee_pct`	Numeric scalar in `[0, 1]`; arrangement fee rate applied to the initial principal.
`capitalized_fees`	Logical scalar; whether arrangement fees are capitalized into the initial drawdown.
`covenants`	Optional list of covenant thresholds, for example `list(dscr_min = 1.25, ltv_max = 0.65)`. These values are passed to `add_credit_ratios()` when computing credit ratios.

Value

A list with two components:

`summary`	A tibble that summarizes, for the all-equity, bullet and amortizing cases, the main valuation metrics (IRR, NPV) and selected credit indicators (for example minimum DSCR and maximum forward LTV).
`details`	A named list with one element per scenario. Each element contains the debt schedule (`schedule`), the full joined project and debt cash-flow table (`full`), the credit-ratio table (`ratios`), and the leveraged metrics object (`metrics`).