Financial Guarantees
Infrastructure FinancePFI/PPP Financings
PFI/PPP Financings
We insure financings for public-private partnership (PPP) transactions, including U.K. Private Finance Initiative (PFI) projects, where host governments make payments to private developers or operators based either on the project's availability to meet its public purpose or on its cash revenues or observed usage (for example, road traffic levels). We also guarantee debt of private companies building or operating essential facilities, such as airports.
Many of these transactions are complex project financings that require insurance to achieve broad distribution. They often involve many participants - construction companies, facilities operators, liquidity providers, property insurers and many others - each presenting different elements of risk. Rating agencies may cap an uninsured issue's rating at that of the "weakest link" among them. With an FSA guaranty, our Triple-A rating supersedes all underlying ratings for the life of the transaction, making the issue attractive to long-term investors. Even if an uninsured transaction can be developed at a reasonable cost, a guaranteed structure frequently proves more flexible and cost-effective.
We guarantee PPP transactions in the transportation and health care sectors, as well as other infrastructure sectors, including government accommodation, university facilities and convention centers.