Analysts and other users of the Construction Risk Methodology should review the specific provisions of each deal to assess whether Neutral, Adverse or Protective treatment is appropriate, considering the expected impact on Probability of Default and Loss Given Default. However our summary guidance is that for most PFI/PPP/P3 projects, CCs should be modelled as having an Adverse impact, except where they are small (say 5%) where Neutral treatment is appropriate.
The actual impact of CC funding for any project is likely to be a function of many factors. Our experience is that the where CCs are large, qualitative factors may be so material as to make a purely quantitative adjustment unreliable. Ratings take full account of qualitative considerations as well as quantitative adjustments.