Contracting Authorities need to be aware that bond solutions generally require more time to prepare than bank solutions as there is usually a need to obtain credit ratings, prepare the bond placement documentation, market the bonds with investors and meet regulatory requirements. The procurement timetable will need to cater for this.
As flagged in Section 9.2.10, a pre-rating may be required at final offer stage and a final rating at financial close. A rating process typically lasts for at least four weeks - longer for a more complicated transaction. However, the preparation of the required supporting material needs to track the progress made in developing a bid. As a result, the process of seeking a pre-rating can only start once the deal structure (e.g. risk sharing, other key terms of the PPP Contract) is stable and is unlikely to change materially. Likewise, a final rating can only be sought once the PPP Project documentation is virtually finalised. Overall, once a preferred bidder has been selected and the PPP Project documentation is finalised, seeking a final rating and marketing the bonds may take four to six weeks longer than financial close in a bank financing.