TradeRisks can assist Housing Associations, social infrastructure and other essential service providers by providing independent and specialist advice from our experienced Project Finance team. Our Project Finance and PPP services span the typical project lifecycle and include:

Financial Advisory and Transaction Structuring

TradeRisks assists clients in structuring transactions to meet their objectives, whether responding to a public sector PPP request for proposals, a greenfield development opportunity or a buy-side or sell-side secondary market transaction. Our comprehensive suite of financial advisory and transaction structuring services includes:

  • Business case development and project evaluation
  • Financial modelling
  • Risk allocation and analysis
  • Potential JV/Partner profiling
  • Bidding strategy
  • Procurement advice and management
  • Preparation of financing structures and models
  • Integrating variables such as economic and political risk, legal matters, taxation, environmental and social concerns
  • Optimal debt/equity structure

Finance Arrangement & Execution

TradeRisks assists clients in raising cost effective financing for the project, whether structured as a PPP/PFI or a conventional project financing. TradeRisks can assist in the evaluation, sourcing and arranging of cost effective and committed debt (senior, mezzanine, subordinated) and equity financing for the project and offers borrowers the full spectrum of services from credit rating to deal structuring, documentation and placement. Our finance arrangement and execution services include:

  • Developing preliminary project funding strategy and finance plan
  • Identifying funding sources for both debt and equity
  • Running funding competitions (e.g. bank funding vs. capital markets funding)
  • Preparing/reviewing financial bids and reviewing/validating financial terms sheets
  • Negotiating with banks and Mandated Lead Arrangers
  • Negotiating optimum capital structure and security package
  • Developing and executing optimum hedging and funding strategy
  • Ensuring value for money through transparency and competition on hedging
  • Facilitating direct access to end investors and swap counterparties

Infrastructure M&A and Secondary Market Transactions

TradeRisks’ offering in this area assists clients to realise value from existing infrastructure-related assets, through refinancing, and mergers and acquisitions. This addresses primary and secondary markets in project finance, public-private partnerships (PPP’s/PFI’s/AFPs), complex service contracts, concessions, privatisations, and infrastructure M&A. Whether acquiring or divesting assets, our experienced team can help clients uncover hidden and overlooked sources of value that can often be found in a typical complex project finance structure and the related debt and derivatives. Our services include:

  • Strategic advice on a project by project or portfolio basis
  • Sophisticated evaluation of debt and derivatives linked to projects
  • Restructuring or refinancing of existing debt and derivatives
  • Raising of acquisition finance
  • Deal structuring

Project Finance and Public Private Partnerships (including PFI) can involve a high level of complexity in terms of the modelling, structuring and analysis required in order to deliver a fundable solution.

Frequently, the funding that has been raised to support these projects has been structured in such a way as to bundle together debt funding with interest rate hedging which is often both complex in nature and involves significant value through the long dated nature of the swaps involved. The bundling of loans and swaps has the effect of reducing price transparency and maintaining a lack of pricing competition for swaps, to the detriment of borrowers, investors and where relevant, the public sector. This is illustrated, for example, in the UK PFI market where funders have established a standard execution spread on swaps of circa 30 basis points (from mid-market), which, on a loan-equivalent basis, is comparable to a LIBOR margin of around 350bps for a typical 30-year swap. Not only does this have no resemblance to the underlying loan margin, but it is also an order of magnitude away from the levels that banks will quote on swaps for similar credits under competition.

TradeRisks is able to reduce funding and execution costs by providing borrowers with the transparency and competitive tension offered through direct access to funding from institutional investors and swap counterparties.