Refinancing & Secondary Markets
Particular concern has arisen in the UK around the refinancing of PFI projects once certain risks have vested, associated adjustments to the risk profile of the project, and profit-taking by the private stakeholders. Concerns have also arisen with the development of secondary markets in PFI equities. This section contains some of the reports and policy guidance dealing with these issues.
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Refinancing
Update on PFI Debt Refinancing and the PFI Equity Market (PDF)
House of Commons Public Accounts Committee, 2007
The Stationery Office
Update on PFI Debt Refinancing and the PFI Equity Market (PDF) National Audit Office, 2006 The Stationery Office
The Report sets out ways in which government projects are funded by the private sector through a mix of debt finance and risk capital.
UKThe Refinancing of the Norfolk and Norwich PFI Hospital (PDF) Public Accounts Committee, 2006 The Stationery Office This is the PAC report into the controversial re-structuring of the Norfolk and Norwich Hospital PFI deal. Private sector consortium Octagon's behaviour was infamously labelled "the unacceptable face of capitalism" and the report is highly critical of both Octagon and the Trust for their actions. There follows a series of recommendations to avoid a recurrence of the problems with which this early contract was beset. HC 694 UK
The Refinancing of the Norfolk and Norwich Hospital: how the deal can be viewed in the light of the refinancing (PDF) National Audit Office (NAO), 2005 The Stationery Office This is the NAO report into the controversial re-structuring of the Norfolk and Norwich Hospital PFI deal. It examines and explains the source of financial disparity between private sector consortium Octagon and the Trust and makes recommendations to avoid a recurrence of such a deal in future. HC 78 UK
Refinancing the Public Private Partnership for National Air Traffic Services (Report) (PDF) National Audit Office (NAO), 2004 The Stationery Office A follow up to the July 2002 Appendix 1, this report addresses the questions asked in the previous report; particularly whether NATS indebtedness to banks, and with comparatively little equity from investors has this made the organisation vulnerable to severe downturns? HC 157 UK
PFI Refinancing Update House of Commons Public Accounts Committee, 2003 The Stationery Office
The Report details its findings, conclusions and recommendations when re-financing a PFI contract.
HC 203 UKRefinancing of Early PFI Transactions: Code of Conduct (PDF) HM Treasury, 2002 The code of Conduct sets out the basis upon which individual Authorities will approach the refinancing by private sector contractors of early PFI. UK
Guidance Note on the Calculation of the Authority's Share of a Refinancing Gain Office of Government Commerce, 2002
The Guidance Note is intended to assist Authorities and their financial advisers in negotiating and agreeing the calculation of the Refinancing Gain.
UKPFI Refinancing Update (Report) National Audit Office (NAO), 2002 The Stationery Office
The Reports set out the recommendations/findings from the Committee of Public Accounts (PAC) and the Office of Government Commerce (OGC) following publication of their various reports.
HC 1288 UKThe Refinancing of the Fazakerley PFI Prison Contract (Web Page) House of Commons Public Accounts Committee, 2001 The Stationery Office Recommendations include that departments should make better use of their negotiating position when PFI projects are refinanced and that there should also be better guidance available so that departments can better share in the benefits. HC 372 UK
The Refinancing of the Fazakerley PFI Prison Contract (PDF)
National Audit Office (NAO), 2000
The Stationery Office
Secondary Markets
List of Resources:
Liquidity and the Secondary PFI Market (PDF) Rees, Robert, 2005 The PFI Journal, Issue 50, September 2005
The document sets out the activity in relation to raising of funds for PFI Equity Markets.
UK