Moody’s lifts outlook on Portsmouth hospital PFI

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Ratings agency Moody’s has changed its outlook on the bonds underpinning the Queen Alexandra Hospital PFI project in Portsmouth to positive, citing a “growing track record of satisfactory operational performance”.

The £265m index-linked guaranteed facility due 2039 retains a rating of Baa1, but Moody’s is now more optimistic about the project’s future and sees its outlook as positive, upgraded from stable.

According to the ratings agency, the project has enjoyed service failure points “materially below threshold levels and low financial deductions” over recent months, plus “good progress” against the work programme to rectify construction defects with almost 100% of remedial works completed.

In April last year, monoline insurer Assured Guaranty wrapped the bond on the project, which has been operational for 11 years and is due to expire in December 2040.

Last year HICL sold its interest in the project to InfraRed Capital Parnters. In 2019, Engie took on the facilities management element of the contract following the collapse of Carillion.