5.34 While the refinancing of debt can bring benefits for both the public and private sector, the costs involved in putting in place the changes necessary to realise these benefits can also be significant, one reason that there has been less refinancing activity in smaller PFI projects. The development of portfolios of PFI projects, where the Special Purpose Vehicle (SPV) equity for a number of projects is held by the same private sector entities, presents an opportunity for shareholders to look at debt arrangements for projects in combination. In some cases it is possible for new financing at a level above the projects (a corporate or "portfolio" level transaction) to replace the initial debt at project level.
5.35 The Government considers that PFI portfolio refinancings are governed by the gainsharing arrangements that have been put in place, either under the voluntary code or contractual arrangements. During 2007, the Treasury reached agreement with a private sector sponsor on sharing gains arising under a portfolio refinancing. The public sector's share of the gain created at the portfolio level has been shared among the relevant authorities for the underlying projects.