P3s & Financing

So the financing of p3 project is
actually, quite, quite complex. The private
sector needs to come together with a
with a proposal which they take actually
two rating agencies and they actually
get the rating agencies to rate the
project from a financial point of view. And once they have that financial rating
they then go out into the marketplace to
secure financing. Most of the financing
in Canada has been coming, coming from
the banks, investment funds and pension
funds. Well sureties had to respond to the
whole p3 marketplace. When the rating
agencies are rating a project in the
past they've tended to say that if
there's a letter of credit as part of
the security package, they rated that
fairly high. The surety industry has
responded by developing a p3 or a hybrid
type of bond, It's a bond that actually
has a liquid component to it or a letter
of credit type component to it. So that
that would be sort of the first call in
the event of a claim under the bond. The
bonds also have other obligations that
we don't see in a normal bond. They may
have coverage for liquidated damages or
delay claims or other financing costs
that may come about
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