With all the doom and gloom surrounding liquidity in the senior debt market and pressure around debt tenors we were delighted to see that Assured Guaranty had issued the first “wrap” for an infrastructure bond in Europe since the start of the credit crisis.
In early January Assured Guaranty signed a financial guarantee for the bond issued to fund the construction of the Worcestershire Royal Hospital PFI project. The £100m bond was issued in 1999 when the project reached financial close and was originally guaranteed by Ambac.
We thought this would be a good opportunity to remind everyone of the role of a monoline insurer and the development of the bond market in infrastructure financing. In a new Industry Insights video posted today, Dominic Nathan of Assured Guaranty explains the role of the monoline and the evolution of the bond market in the infrastructure financing
Dominic gives a detailed explanation of the differences between bond and bank funding at both a modelling and structural level and explains how the close process works when using a wrapped bond in project finance.