Our Company
Business OverviewRisk ManagementPublic Infrastructure Underwriting
Public Infrastructure Underwriting
In many transactions in the public infrastructure sector, we apply structuring techniques developed originally for U.K. PFI transactions. These structured transactions are generally supported by user fees or the financial obligation of a central or local government to make payments to a private-sector consortium for the construction and operation of an essential public facility, typically over a concession term of 30 years or more.
In addition to analyzing the underlying revenue source, such as traffic levels in a toll road transaction, we pay particular attention to the experience and qualifications of the many participants in these complex transactions and how construction, operating and property risks are allocated among them. The objective is to assure that such exposures are borne not by FSA but by appropriate investment-grade parties.
To qualify for our guaranty in the utility sector, privately owned utility companies must provide essential public services under appropriate government regulation. We specifically exclude utilities that are subject to market volatility such as power generation and retail gas and electric supply companies.
Material interest rate and currency risks must be mitigated through swaps or other acceptable means.
To assure our credit standards are met, each infrastructure transaction must be specifically approved by a Management Review Committee, composed of the chairman/CEO, the president, the chief underwriting officer, the general counsel and the chief international public finance and infrastructure underwriting officer.