We do not require an external rating, but we will rate all of our transactions through our internal rating model which is aligned with the major rating agencies' criteria.
Some of our mandates permit non-investment grade financing, as long as the debt is senior secured. Ticket sizes for non-investment grade vary across the sub-investment grade scale.
Yes, we will consider RPI and CPI-linked debt for our Sterling mandate.
Yes, both our multi-asset and Euro funds are able to provide floating rate debt. We have co-financed a number of transactions alongside banks who will provide interest swaps to borrowers in respect of our floating exposure.
Our mandates cover a wide range of maturity ‘sweet-spots’. We have financed facilities around eight years, as well as over 40 year facilities in the student accommodation sector.
We look at core+ infrastructure, which covers renewable energy, social infrastructure, transport, utilities and transmission assets.
Where we are sole lender in a transaction, we are able to perform the agency function in-house, although we will require an external security trustee. When we are lending alongside other funders, we would need an external agent. This could be one of the banks (if such lenders are involved), or alternatively an independent house. Recently, fees of independent agents have reduced to a level comparable with bank agency fees.
Not all our mandates require make-whole, where there are certain provisions placed on the issuer to compensate investors if the debt is called early. Nevertheless, much of our Sterling money comes from our internal client who, in accordance with Solvency II, is required to comply with Matching Adjustment rules. This is where an insurer sets aside a portfolio of assets (e.g. infrastructure assets) to back a predictable portion of their long-term liabilities. Such investments must include pre-payment (re-investment) protection for termination scenarios other than default in order to be Matching Adjustment compliant.
We can consider deferred drawdowns across our mandates.
We are capable of running an accelerated credit process where required and have done this for example on our first rolling stock transaction, receiving credit committee approval within 4 weeks of due diligence receipt.
We know that some bidding processes require support letters with margin holds as part of the financing submissions and we have held spreads in excess of six months to accommodate such requirements. Please speak to us about your bid requirements and we will do our best to accommodate these.
We are flexible on the form of financing.
Yes, this is something that we can consider, as well as sculpted amortisation profiles.
Yes, this is something that we our comfortable with where there is strong economic rationale for the asset. We financed the A28 in France, for instance.
We do not currently provide swaps alongside our floating rate financing; however, we have significant experience of working alongside banks who will hedge our interest rate exposure.
Aviva Investors - Approval Process
Details of our process are set out below.
|Initial funder discussion (Pre-Screener)
|Discussion with funder to confirm high level appetite for transaction at proposed pricing and ticket size
|Debt amount, general project information, timescales, proposed finance structure
|Can be arranged ad-hoc, within 1-2 weeks of information receipt
|Aviva Investors Credit Committee
|Full approval to terms of loan including loan amount, margin, LTV etc. Approval valid for 3 months
|Financial model, legal/technical/insurance/T%A due diligence, financial information on key counterparties, key commercial finance/project terms agreed
|Within 4 weeks of information receipt
|Funder Credit Committee
|Approval from highest level of authority required. Subject to reserved matters which can be signed off by Credit Committee
|Usually scheduled in the same week as AI Committee
|Final sign off
|Final financing terms and due diligence reports reviewed to confirm consistency with credit committee approvals
|Final form of all due diligence reports (model auditor, technical adviser, insurance adviser, legal, T&A) and final form docs. Final drawdown and repayment schedule and financial model
|Immediately prior to financial close