Peterborough hospital PFI turnaround gets bonds boost

Ratings upgraded as replacement of FM provider “indefinitely postponed” thanks to improved relationships

Ratings agency Moody’s has upgraded its outlook for the Greater Peterborough Health Improvement PFI project after seeing a significant improvement in performance.

Moody’s affirmed the Baa3 ratings of the bonds and senior secured bank credit facilities underpinning the project, as well as upgrading the project’s outlook to positive as a result of its “continued satisfactory operating performance”, demonstrated by the low levels of service point failures in recent years.

The project, which saw the creation of a new Peterborough City Hospital, a City Care Centre and the Cavell Centre for Mental Health services opened in 2010, had previously faced significant issues that had affected the working relationship between the parties.

These issues have been largely resolved, said Moody’s, following the formalisation of Commercial Settlement Agreements (CSAs) at the end of 2018. 

“The implementation of the measures agreed as part of the CSAs have led to a consistently improved operating performance and increased collaboration between project parties,” Moody’s added.

The ratings agency also pointed out that a planned replacement of the FM provider, Multiplex Services Europe, has been postponed indefinitely. Initially, the replacement had been postponed because no other provider wanted to take on the problem job - however the improved relationships between parties means the pressure to replace the company has been removed.

In 2020, the project won the Partnerships Awards’ Judges Choice Award for the work of the public and private partners in turning the project around.