Sydney-based Crossway Capital is making direct access to the US capital markets available to major projects worldwide.
Their Insurance Wrapped Project Finance (IWPF) programme exploits a financing structure used by US banks on project values from $100 million to upwards of $10 billion for 30 years.
The IWPF programme, developed with a London-based capital markets specialist and Lloyds-of-London underwriting syndicate, now enables banks worldwide to act as a direct conduit to the US capital markets for their major project financing clients.
The funding can be used for projects in renewable and traditional (oil & gas) energy, real estate, infrastructure, agriculture, telecommunications and other sectors.
Clients who benefit from the structure in the US are usually municipalities and major corporates that can show an acceptable Moody’s or S&P credit agency rating or can introduce some form of credit enhancement.
To cover this, IWPF wraps the project in interlinked pro-forma insurance policies, which have been developed over two years with a Lloyds-of-London underwriting syndicate and are then tailored to the individual requirements of each project. This effectively endows the project with the Lloyds of London A/AA rating, making it immediately acceptable to the capital markets.
Crossway CEO Johnny Jalin said: “IWPF has taken a long time to develop, but what we are now introducing to the market will have a transformative effect on major project financing worldwide. It’s important to point out that IWPF can only be applied to project financings that are completely shovel ready. Meaning that documentation confirming access to land, building and other permits and, where applicable, off-take agreements are all in place. We can’t provide seed or any other form of early-stage financing.”
As part of the process, as soon as a project financing has been approved the client will advise their bank. The bank will then work directly with the capital markets specialist to structure the financing. The structure facilitates the funding to come direct from the capital markets, through the bank to the client.
Jalin added that Crossway is also able to provide re-financing and re-capitalisation for active projects and their banks.