Public Private Partnership and Social Infrastructure Financing
Capital Markets solutions for private and public sector clients on infrastructure and project finance transactions. Our success in infrastructure and project finance draws on our extensive knowledge in real estate, fixed income and public finance.
Public Private Partnership and Social Infrastructure Financing (P3)
What Is P3 and social infrastructure Financing?
P3 and social infrastructure financing involves providing real estate / project capital for projects with contractual agreements between a government (federal, state, or local) and private sector agents, in which the resources of the two sectors are combined to achieve more economical financing and better delivery of public assets and/or services.
Tenant/Credit Profile
Any (IG, HY, Public, Private, Rated, Non-Rated)
Lease/Contract Type
Expense Treatment: Absolute net whereby underlying credit/operator/user of the TI/Equipment is responsible for all expenses associated with the TI and Equipment collateral.
Note Term
Typically, coterminous with the remaining term of the operative agreement set.
Amortization
Typically, coterminous with the remaining term of the operative agreement set. Although longer amortization periods may also be considered.
Recourse
Non-recourse carveouts only
LTV
Up to 100%
LTC
No LTC constraints
DSCR
Typically, 1.00x – 1.05x
Transaction Rating
Depending on the nature of the transaction a rating agency may be utilized.
Financing Instrument
Typically, these financings are structured as taxable private placements or 144a private placements.
Construction/Installation Funding
Yes, the program may be applied to construction/development projects.
products & contract types
Credit tenant lease
Project finance
Sale-leasebacks
Concession agreements
License agreements
Installments
Ground lease financings
Services agreements
Facility agreements
Energy savings contracts
Tax increment financing contracts
Tax credit equity (ITC, LIHTC, HTC)
Special tax district financing
- Tax increment financing (TIF)
- Business district financing
- Special hotel occupancy tax financing
Asset & Collateral Types
Classrooms and admin facilities
Central utility plants
Hospitals, clinics and medical offices
Social and affordable housing
Student housing
Sports and recreation facilities
Wastewater treatment plants
Courthouse
Penitentiaries
City hall
Police and Fire stations
Parking facilities
Horizontal infrastructure
HVAC, lighting and building systems
Data center
Solar and wind farms
Waste to energy facilities
Sector Concentrations
Government (federal, state, and local)
Higher-education (public and private)
Not-for-Profit
Healthcare
Research institutions
Political subdivisions (e.g. park districts)
Special tax districts
Hospitality
Corporate
Professional sports
Renewable energy
Mesirow’s success in the P3 and Social Infrastructure space is the result of decades of experience in the financial services industry, drawing upon our extensive knowledge of public finance, real estate and fixed income. We also offer -
- Distribution
- Complimentary business units within the firm
- Ability to provide liquidity / Balance Sheet access when needed
- Access to in-house research, sales, trading
What are the potential benefits of a P3 structure?
- P3’s enable the skills and assets of both the public and private sectors to be shared in the delivery of a service or a facility
- Speed of execution
- Overall cost efficiency
- Attractive cost of capital
- Limited or no tax payer involvement tied to procurement
- Custom tailored structures designed to accommodate various tax and accounting objective
- Asset usage flexibility
- Efficient procurement
