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 ?
1) Excludes match-funded other nonrecourse debt of $105 million where the debt is match-funded with corresponding assets and we have no interest rate risk.
Any discharge or forgiveness of the nonrecourse debt, however, does not result in taxable cancellation of debt income (CODI); that is because the lender cannot legally pursue any other assets of the borrower.
He would not rule out another round of nonrecourse debt such as the pounds 485 million raised to upgrade and reduce sulphur dioxide emissions at Rugeley earlier this year.
Tata Coffee, India's largest coffee plantation company, said the acquisition would be financed by a combination of equity and nonrecourse debt.
Before reviewing the rules for nonrecourse debt, it is helpful to view the relevant history of the court cases that led to the development of the rules.
300 (1983), in which nonrecourse debt permits a taxpayer to have a basis in excess of his economic investment.
Thus there can be no discharge of indebtedness income because the amount realized on the deemed sale equals the full amount of nonrecourse debt principal.
1) Excludes match-funded other nonrecourse debt of $108 million where the debt is match-funded with corresponding assets and we have no interest rate risk.
465(b)(6)(B), and the consequences to other members of the LLC when a member guarantees qualified nonrecourse debt.
Converting nonrecourse debt to recourse debt can create COD income applicable for IRC Sec.
Since an insolvent taxpayer can exclude COD income, tax-payers frequently try to avoid sale treatment when disposing of property securing nonrecourse debt so they can report COD income.