INSURANCE WRAPPED PROJECT FINANCE
If all the participants in your project, meaning you, your contractors, feedstock providers, off-takers etc. can show track record and financial stability, the Insurance Wrapped Project Finance (IWPF) program can, subject to all the usual conditions, deliver funding direct from the capital markets.
This means that your funding will be on the same terms as those able to show a minimum Moody’s or S&P ’A’ rating, a pre-requisite for funding from pension funds and other professional capital market investors. Your funding will come on terms that simply cannot be matched in the mainstream fragmented and hazardous project finance market. Clients are now benefiting from 100% debt finance at rates linked direct to 30-day LIBOR.
IWPF is structured through a unique and powerful triumvirate of seasoned professional firms. We are not brokers but funders with direct, discretionary access to up to £350bn of project financing and re-financing per annum. Here’s how IWPF works:
1. Aon Capital Group is an appointed representative for the IWPF intake manager, ensuring that the capital markets partner (CMP) and the Lloyds of London insurance syndicate only get to see those deals that are viable.
2. IWPF’s London-based CMP provides direct access to the capital markets. These are pension, fixed income, mutual and other funds whose primary investment criteria is the credit agency rating of the borrower. Their responsibility is to their policy-holders and so they seek to ensure risk-free opportunities that can only be met through an acceptable ‘A’ or better Moody’s or S&P rating. This rating delivers terms which simply cannot be matched by the mainstream project finance market.
3. IWPF’s Lloyds of London underwriting syndicate wraps your project in a series of interlinked insurance policy templates covering all aspects from EPC contractor performance, off-take, political/country risk, and other aspects directly tailored to your project. This endows your project with the Lloyds’ ‘A’ credit agency rating demanded by the capital markets from where your funding is sourced.
We are primarily interested in viable projects in the following sectors with a minimum deal value of $/€/£100 million, with no maximum. These include:
• All renewable energy
• Hotels and Resorts
• Social housing and other social infrastructure
• Re-financing of existing projects, M&A and other
The key criteria for applicants to IWPF is that the project is ‘shovel ready’ in every respect and all parties involved in the project can demonstrate solid track record and financial stability. You also need to show that revenues into the project will be sufficient to cover debt repayments.
Contractors must clearly demonstrate that they are capable of delivering to cost and time frames and suppliers of feedstock or materials needed to make the project viable are able to meet demand.
Whilst all these areas are insured through IWPF, the underwriters will obviously look at all project participants in depth before producing their policies. The insurance premiums are added to the loan.
To ensure that you receive a first-class service and to eliminate any possible delays please comply with our procedures.
Please contact Aon Capital Group Inc. :
You will be contacted directly with a short intake questionnaire which we will ask you to return with your executive summary, teaser or elevator pitch. For guidance on how to produce an executive summary please click HERE.
The intake questionnaire will tell us if we can assist in principle. We will come back to you within a few days advising if we believe we can take your project forward. If this is the case you will be asked to sign the IWPF Intake Manager’s Engagement & Consultancy Agreement (ECA). There is no fee involved in this.
We will then arrange for a conference call with you after which you will be sent a combined fact-find/three-way NCNDA (Non-Circumvention and Non-Disclosure Agreement) for you to complete and sign. This document overrides the ECA you have signed with the Intake Manager.
The NCNDA is between you, the Intake Manager and the Capital Markets Partner (CMP). At this stage we will also ask you for documentation supporting your project’s ‘shovel ready’ status. Please prepare these as attachments as many funders we work with are reluctant to use Dropbox or similar services. Each file name must clearly indicate what the file contains.
Our CMP and the insurance syndicate need your documents prepared and presented in a straightforward manner. If your file is the PPA with XYZ energy, name the file ‘XYZ energy PPA’.
If your supporting documents meet the required criteria, they will be forwarded to CMP in the UK as a formal submission.
The CMP has been a fixture in the City of London for many years and is deeply embedded in the global capital markets.
On acceptance by them your project will be discussed with the Lloyds syndicate to confirm your project is something they want to ‘wrap’.
Once approved in principal by the underwriters you will be sent a ‘funding structure blueprint’ based on the interest they believe will be shown by the capital markets. The actual blueprint will depend on the nature, location and other factors defining your project from a funding standpoint.
On your acceptance of the blueprint, and a conference call with the CMP, you will be sent their engagement and fee agreement (in the region of 5% payable on funding) to sign.
The underwriting syndicate will review all your documentation in depth and produce a detailed and comprehensive questionnaire for you to complete.
Your project is endowed with the ‘A/AA’ rating assigned by the world’s oldest and largest insurance. market.
This is a critical part of the process and it is essential that you apply time and full diligence on the questionnaire. An accurate response to the questionnaire will avoid delays and question marks appearing over your project.
From the information you provide the premiums on the interlinked insurance wraps will be calculated and added to your capital requirement. Your funder(s) will be happy to add this premium to your loan as it provides unique reassurance for them.
There is a one-off fee that must be paid to the underwriters to prepare the insurance wraps for your project. The fee is dependent on the nature and complexity of your project but will not exceed GBP10, 000. The CMP will advise you of the cost during your conference call and it is not due and payable until terms are agreed and you have engaged with the CMP.
It is now time to involve your bank…
At this stage it will be necessary for you to advise your bank that you anticipate an offer of funding in which they will need to be involved. Your IWPF Funding Blueprint and Engagement Agreement are strictly confidential between yourself and the CMP and must not be shared, with anyone.
However, please send your bank this IWPF Guide and ask them to click the link below in order to get an understanding of the IWPF structured financing. You will already have given the CMP your banking contacts and he will be in touch with them directly to start the funding process:
Major Projects Worldwide Can Now Directly Access U.S. Capital Markets
How a little known banking instrument, in use for 30 years in the U.S., can now be exploited by major projects, and their banks, worldwide
Your bank is requested to click the Global Banking & Finance logo above to view the article published there on how they can participate in the structured financing for the funding offer which has been made to you. It will be necessary for your bank to introduce their project and structured financing team(s) to your transaction.
Your bank is not required to contribute in any way to the financing and there is no risk to them. They are simply the conduit through which your funds are channelled to you through the IWPF structured financing.
Once your insurance wraps have been finalised and documentation produced, the funding partner will present your project to the relevant capital markets sources. It is likely that discussion will already have taken place with some funders ‘subject to’ insurance documentation being produced.
IWPF and all its constituent parts will work as fast as you and your bank will work in order to achieve a timely closing.
At no point will you be asked to pay any fees in advance, other than the preparation costs for your insurance wraps as described above.
You could save a great deal of money if your project is already financed and you have maintained a good repayment record. You could possibly receive re-financing on the same terms as our project financing, directly linked to 30-day LIBOR. Click the link and see how that would compare to your current terms.