QMPF acted as financial adviser to Citycare Limited for the refinancing of four of Hull Citycare Limited’s portfolio of healthcare projects. From initial ‘proof of concept’ discussions through to financial close, QMPF provided Citycare, its public sector partners and funders with rigorous financial analysis and detailed project financial modelling to deliver the transaction. The refinancing, which was structured as two transactions, one of which incorporated a cross collateralised loan structure, resulted in all of Hull Citycare’s projects to date now being financed by Aviva Investors, 14 in total. The refinancing delivered a material improvement in financing terms enabling a significant refinancing gain for public and private sector shareholders, as well as public sector tenants. QMPF subsequently developed the operational financial models to support the projects on an ongoing basis.
Built as part of the NHS LIFT (Local Improvement Finance Trust) Programme, Hull Citycare Limited’s portfolio of healthcare projects brings together the skills, expertise, and resources of both public and private sector partners to deliver lasting transformation of NHS primary care facilities. The public and private sponsors – Community Health Partnerships and the Sewell Group – aim to provide first-class premises for a range of clinical services to patients in areas requiring significant infrastructure investment.
Dave Leedham, Investments Director, Sewell Group commented:
“We are delighted to have reached financial close on the refinancing of four of Hull Citycare Limited’s portfolio of healthcare projects, almost 3 years after discussions first began. At the outset, each SPV was to be refinanced independently but working with QMPF we identified that the individual available cashflows and existing loan-to-value covenant made this unfeasible. QMPF was central to us identifying and considering an alternative approach of cross-collateralising three of the SPVs, allowing us to navigate around the perceived stumbling block and proceed with a larger-scale refinancing. QMPF undertook particularly valuable work considering the interaction between three of the individual project models, with the new debt ratios being assessed in aggregate, as well as with benchmarking the breakcosts associated with the existing debt in the overall refinancing. This rigorous modelling and ongoing advice throughout the process ensured that value for money was achieved for both the public and private sector shareholders. This transaction helped highlight to us and others in the market that the refinancing of PPPs remains achievable and can deliver value even where it is not immediately apparent and has supported Citycare in its objective to continue to deliver more from LIFT and enhance the health estate in Hull.”
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