Public Private Partnership and Social Infrastructure Financing (P3)

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)

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Expense Treatment

Operating expense responsibility may vary amongst the key transaction participants.

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Note Term

Typically, coterminous with the remaining term of the operative agreement set.

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Amortization

Typically, coterminous with the remaining term of the operative agreement set. Although longer amortization periods may also be considered.

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Recourse

Non-recourse carveouts only

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LTV

Up to 100%

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LTC

No LTC constraints

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DSCR

Typically, 1.00x – 1.25x

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Transaction Rating

Depending on the nature of the transaction a rating agency may be utilized.

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Financing Instrument

Typically, these financings are structured as taxable private placements or 144a private placements.

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Construction/Installation Funding

Yes, the program may be applied to construction/development projects.

• Credit tenant lease
• Project financings
• Sale-leasebacks
• Concession agreements
• License agreements
• Installment contracts
• Ground lease financings
• Services agreements
• Facility agreements
• Energy savings contracts
• Tax credit equity (ITC, LIHTC, HTC)
• Special tax district financing
  
  • Tax increment financings (TIF)
  • Business district financings
  • Special hotel occupancy tax financings

• 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

• 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
• Complementary 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