§2.7 describes how a fronting bank arrangement can be used to increase the level of competitiveness in swap pricing; and §4 describes how this arrangement may also address an important issue concerning swap credit premiums. This Appendix summarises the key features of a fronting bank arrangement. Whilst this structure may not, so far, have been used by a PFI Contractor (at least not with any publicity) it has been used within the wider project-finance market. It remains available for Authorities to specify as a requirement within the ITN55 or, where not specified within the ITN, for Contractors to offer preemptively in their ITN responses, so as to improve the value for money of their bids.
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55 Or as part of a funding competition to be implemented by the preferred bidder.