DBRS, a credit rating agency, has recently issued a ‘ratings under review’ on the Oakville - Trafalgar Memorial Hospital P3 project located in Oakville, Ontario.

The Canadian credit rating agency has placed Hospital Infrastructure Partners’s ratings under review during the operational phase of the project. Hospital Infrastructure Partners is the special purpose vehicle (SPV) responsible for design, build, finance and maintain (DBFM) of the hospital under a 34-year agreement.

According to sources, Grant Headrick, a managing director of infrastructure finance at DBRS, stated that under review status arose due to problems in the hospital’s air handling units and door locking mechanism.

All of these problems haven given rise to unavailability deductions for these phases and payments from the Oakville Hospital are not being made to the service providers. 

The special purpose vehicle is a consortium composed of Fengate Capital, EllisDon and Carillion. Oakville hospital is a state-of-the-art facility and includes a full range of health services such as complex continuing care, rehabilitation and acute care. The facility include 704 beds and cover approximately 2 million square feet.

The facility was completed last July and it entered into service in December 2015. The project had an overall cost of US$1.25 billion.

The hospital development was financed through a combination of CAD558 million (US$431 million) bond issuance, CAD448 million short term senior debt and CAD119 million equity investment. The bonds was initially priced at US$99.19 per US$100 face value at a coupon of 5.439 per cent,

Last may, the bonds hit a six-month low on May 30, when they closed at US$113.874, down US$6.086 on the day. At that price the yield translates to 4.265 per cent.