Debt Refinancing

DWPF has been a market leader in refinancing PFI and PPP projects, having successfully completed over 20 transactions since 2000.

DWPF has been engaged to refinance operational projects performing to plan with the aim of increasing returns for investors. We have also advised on corporate restructurings and refinancing projects where construction and other difficulties have been encountered, thereby requiring a restructuring of debt to aid project robustness.

Where a PFI refinancing is undertaken to improve financing terms and increase investor returns, an in-depth understanding of Public Sector sensitivities and Treasury guidance and policy is required -this ensures buy in from all parties on the potential transaction. DWPF has significant experience in this area, having advised on numerous transactions governed by either the Voluntary Code or other contractual arrangements and working to the Treasury’s Standardisation of PFI Contracts (SOPC) guidance.

For primary transactions that have been funded from the banking market, financing efficiency can often be improved in a number of areas. For example, margins may be reduced, cover ratio and gearing constraints may be relaxed and the debt tenor and structure varied. Reserve accounts can also be restructured and it may be possible to leverage residual value positions.

These changes, along with other potential structuring and tax efficiencies make it possible for project companies to raise additional financing, giving the investor the ability to realise upfront refinancing gains and increasing investment returns. Alternatively, an investor may prefer to realise potential refinancing gains over time, increasing the ongoing yield of the investment.

In the vast majority of PFI cases a share of the benefits realised from a qualifying refinancing will be paid to the relevant Public Sector Authority. DWPF has significant experience in leading negotiations with Authorities and their advisors, calculating gain share amounts and demonstrating the impact on termination liabilities and overall value for money.

DWPF’s advisory and financial modelling expertise seeks to maximise potential benefits to investors from refinancing projects, and our activities in this area include the following:

• Advisory services in regard to single projects, group schemes or portfolios
• Options appraisal for shareholders
• Financial model rebuild (where required) and financial analysis
• Financial structuring to add value in other areas
• Sourcing of financing, funding competitions, negotiation of terms (through existing or alternative financial markets)
• Financial project management services
• Public sector presentation, negotiation and assistance