Nonrecourse Debt

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Non-Recourse Finance

A loan secured by the revenue of the project the loan intends to fund, and nothing else. That is, non-recourse finance does not allow the bank or other lending institution access to the borrower's other assets in the event of default. This is a relatively high-risk form of financing; projects that utilize non-recourse finance generally have uncertain revenue streams and long loan periods.

Nonrecourse Debt

Nonrecourse debt is debt for which the borrower is not personally liable. If the borrower defaults, the lender can take the property used to secure the loan, but no other property of the borrower.
References in periodicals archive ?
The non-recourse loan, in the amount of $3,800,000, is fixed at 4.
The bank was able to offer an out of state borrower with a non-recourse loan due to tenants and leverage.
The proceeds of this $7MM, 65% loan-to-value non-recourse loan were used by the borrower, A&M Hospitality, for the refinance of recourse, local bank renovation debt.
Under the US's non-recourse loan system, homeowners who are no longer able to meet their mortgage obligations, can hand over their keys and walk away allowing the bank to sell the property.
The essence of a non-recourse loan is that, upon the occurrence of a default by the borrower, the lender may look solely to the mortgaged property securing the debt.
2 million non-recourse loan from Bear Stearns Commercial Mortgage Inc.
Bank of America Large Loan Trust 2009-FDG is a USD460m issue backed by a single, seven-year, fixed-rate non-recourse loan to entities of Fortress Funds.
The seven-year non-recourse loan is with a syndicate of 17 banks, including Banco Continental of Panama, Societe Generale, and Banco Nacional de Panama.
The Quebec government has submitted a proposal to provide a non-recourse loan of about 25 per cent of the required amount, with another 25 per cent being sought from the federal government, and Globex contributing the remaining 50 per cent for the study.
Because it was what bankers and shelter promoters call a non-recourse loan, McGovern himself is not liable for that extra $460,000 should the deal somehow go sour.
CBL also completed a ten-year non-recourse loan with an insurance company secured by CBL Center I and II in Chattanooga, TN.
Department of Housing and Urban Development (HUD) loan, resulting in a 40 year, fixed-rate, fully amortizing, fully assumable, non-recourse loan.