All Case Studies
Infrastructure / SPV
First-Time Infrastructure Rating, Delivered Better-Than-Expected Outcome
BBB- Target → BBB Achieved
First-time SPV rating. Sponsor constraint overcome. Parent entity also upgraded.
Background
A road infrastructure SPV undertaking a Hybrid Annuity Model (HAM) project approached Neofincred for its first external credit rating. The objective was to strengthen lender confidence and support the project's future funding requirements.
The management initially targeted a BBB- rating, a reasonable expectation given the first-time issuer status and the nature of the project. However, the assignment carried compounded challenges: no historical track record, a sponsor entity rated lower at BB+, and the inherent complexity of modelling cash flows for an infrastructure project with long-term annuity structures.
The Challenge
- First-time rating exercise with no historical financial track record at the SPV level
- The sponsor entity carried a BB+ rating, creating an immediate perception constraint for the project
- Rating heavily dependent on cash-flow sustainability, annuity visibility, and debt servicing projections
- Sensitivity around project execution timelines, cost assumptions, and potential overruns
- Financial and operational inputs spread across multiple internal teams, requiring tight coordination and consistent data
How Neofincred Helped
- Developed a detailed, scenario-tested cash flow model for the HAM project, demonstrating strong debt servicing capability even under downside assumptions
- Clearly separated SPV-level credit strengths from the sponsor's existing rating, establishing the project's right to be evaluated independently
- Built a structured argument for why the sponsor's existing BB+ rating was conservative and not reflective of actual credit risk at the SPV level
- Highlighted annuity payment visibility, ring-fencing mechanisms, contractual protections, and governance structures as credit positives
- Coordinated information flow across multiple departments to ensure accuracy, consistency, and completeness in all submissions
- Worked closely with the rating agency to address every analytical assumption and strengthen overall comfort with the project's standalone credit profile
The Outcome
- Achieved BBB investment-grade rating, one notch above the initial BBB- target
- Project's standalone credit strength validated independently, despite sponsor-related perception constraints
- Lender confidence strengthened for the project's future funding plans
- Neofincred was subsequently appointed as advisor to the parent entity, which later achieved a rating upgrade
This was our first external credit rating, and the presence of a lower-rated sponsor created an inherent perception challenge. Neofincred played a critical role in building a robust cash flow model, coordinating inputs across teams, and clearly articulating why the project's standalone credit strength deserved independent consideration. Their ability to engage analytically with the rating agency and address conservative assumptions helped us secure a BBB rating, better than our original expectation. We also continued the association with Neofincred for the parent entity, where their intervention later resulted in a rating upgrade. We value their clarity, preparation, and depth of understanding of the rating process.