Debt Refinancing

DWPF has built up a significant degree of expertise in the refinancing market, delivering value for money to the public and private sectors through improvement of financing terms and structures on transactions. We have advised on over 20 successful transactions in the education, higher education, local government, health and energy sectors and have provided financial advice on:

• The 1st PFI schools refinancing transaction within the UK
• The most PFI schools refinancings of any financial adviser in the UK
• Early transactions predating refinancing contractual clauses
• Refinancing transactions which follow the UK voluntary code, subsequent  UK Treasury policy and specific contractual requirements

As well as stand alone transactions, we have advised on both group and portfolio refinancings, including transactions that cross-collateralised equity cash flows and consolidated project cash flows, in order to gain optimal financing terms and reduce individual project transaction costs. We have also participated in the refinancing and restructuring of projects in challenging circumstances, rearranging debt and financing terms to facilitate continued project viability and delivery of services.

Our experience of refinancing covers the renegotiation of terms with existing lenders, the replacement of incumbents with new institutions and the use of alternative funding products from the bond and capital markets. Additionally, we have worked on the refinancing of a not-for-profit PPP transaction.

DWPF pioneered the use of the sale of receivables structure in the PFI market, an innovative method of assisting tax efficiency, and we have made extensive use of short lease premium relief and other financial arrangements to increase efficiencies in refinanced projects.

Where significant upfront returns are generated from a refinancing, the distribution of gains to investors can be problematic. Retained earnings often restrict the payment of refinancing gain through the use of dividends. However, DWPF has experience of a number of alternative methods, including use of financial assistance compliance procedures.

As well as refinancing larger PFI/PPP transactions, DWPF has been able to viably refinance a number of smaller transactions through the use of a streamlined template approach and careful use of other advisers. This has led to additional value for the public and private sector.

The public sector is an important party in refinancing transactions; consent is usually required for the amendment of financing documentation. DWPF takes a proactive stance in negotiations with the public sector, preparing detailed analysis to prove refinancing gain calculations, changes in termination liabilities where relevant and the overall value for money of transactions, whilst ensuring that central government guidance is followed.