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Same project, same asset, same sponsor — thirty points of proceeds and 75 basis points, entirely from de-risking the exit. In a market where capital is deep, what is actually being rationed is certainty.
A tax credit bridge loan with no committed buyer advances 75% against credits marked at 90 cents. That is 67.5 cents of face. Find the buyer, and the advance rate goes to 98% and the spread drops from 225 over SOFR to 150.
Same project. Same asset. Same sponsor. Thirty points of proceeds and 75 basis points, entirely from de-risking the exit. That is the whole game in specialty finance right now — and most capital raises are still being run as though it were a rounding error.
Tax credit insurance is now being described by the buy side as a synthetic investment-grade wrap. Premiums have moved from 2–4% up to 3–5%. Fewer than 18% of policies ever see a claim. Investment-grade sellers still clear one to two cents above an insured deal, so the wrap narrows the gap rather than erasing it. It is worth knowing which side of that spread you are pricing into your model.
In July, Ariel Green paid a technology performance insurance claim on a waste-plastics pyrolysis facility in Korea, on a policy running through 2031. Lenders have spent years waiting to see a paid loss on first-of-a-kind conversion technology rather than another product brochure. Now there is one.
Lenders are diligencing FEOC up the ownership chain of every project company. One of the largest tax equity investors in the market said it plainly in June: there is not enough IRS guidance to say definitively that a project will be FEOC compliant. That risk is largely uninsurable today, so it is being priced into uncapped indemnities and holdbacks instead.
The pattern underneath all three is the same. Capital is deep — North American project finance ran roughly $260 billion across about 500 deals last year, up 41%. Liquidity is not the constraint. What is being rationed is certainty.
So when a raise stalls, the problem is usually not lender appetite. It is that nothing in the structure converts a technology question or a tax question into a credit question somebody can actually underwrite. That conversion is the work.