S&P Global Ratings has published credit rating for hospital PFI projects in UK. The UK is experiencing a significant increase in COVID-19 cases, confronting the NHS with an unprecedented challenge. S&P Global rate the debt issued by 19 hospital PFI projects with long-term arrangements with the NHS to construct, maintain, and finance hospital buildings across the U.K.  These projects do not conduct clinical services - their primary role is to provide major maintenance and facilities management of the hospital properties, thereby ensuring that the buildings are available for the NHS to use.

The projects themselves do not employ clinical staff and their revenue does not directly relate to the number of patients visiting the hospital. Because the PFI projects' activities relate to maintenance and reconfigurations, however, they are critical in maximizing the hospitals' capacity. As a result, PFI projects and their subcontractors are now at the frontline in fighting COVID-19.

The affirmations reflect the expected spread of COVID-19 to largely leave the PFI projects financially unscathed, owing to their solid contractual structure and guidance from the central government from April 2, 2020. S&P foresees unprecedented support from the government in the sector, which is commensurate with the challenge. Provided that the PFI projects use their best efforts to support the NHS during this crisis, and expect that they will come out of this situation in no worse position overall.

The projects' ability to carry out major maintenance works could be delayed, materially erode credit quality will not be affected. Many rated projects have a backlog of major maintenance works because the NHS has been operating at close to capacity for a number of years, which makes getting access to some spaces challenging, even under normal conditions. Given the focus on increasing bed capacity, regular major maintenance is not a key priority unless essential. 

S&P expects that the required investment to increase bed capacity will leave the projects largely financially unaffected because the NHS will cover the associated costs. Increasing bed capacity requires changes to floorplans and various building systems. Some trusts have already completely suspended some non-essential services and converted space, including operating rooms, into intensive care units. These changes are considered variations under the concessions and their costs are generally borne by the NHS (either upfront or ultimately), hence limiting the financial impact on the PFI projects.