Application note: interest and inflation risk
The application note has been designed to help Authorities understand and evaluate cost effective strategies for managing interest rate and inflation risks in PPP transactions.
The guidance note provides guidance on the calculation and use of internal rates of return (IRR) in PPP contracts.
Preferred bidder debt funding competitions
Following the public sector consultation of preferred bidder debt funding competitions, guidance has been published in draft-outline for wider feedback.
The Code of Conduct sets out the basis on which individual Authorities will approach the refinancing by private sector contractors of early PFI transactions. It is a voluntary Code to enable private sector contractors to share refinancing gain with the public sector on a consistent and equitable basis.
The guidance note is intended to help authorities and their financial advisers in calculating Refinancing Gains.
The government has previously expressed its concern that the Spens formula, which applies to listed bonds in the UK, creates an extra cost of termination for a PFI project. To address this concern HM Treasury requires all PFI contracts funded through the capital markets to contain a modified Spens clause. This guidance has been issued to assist Authorities in determining the most appropriate form of modified Spens to be applied.