Financing

Having a partnership with Crito Financial is an important steppingstone.  It allows our team to generate the funding for projects.

The private sector has always been involved in the funding and operation of concessions at airports, but airport sponsors are increasingly turning to the private sector for the financing of crucial airport infrastructure—terminals, airfield improvements, passenger support functions, and ancillary facilities.

Our partnership with Crito Financial offers us the opportunity to finance Public-private partnerships (P3s) with flexibility and coverage that extends past survival and into thriving.  Our financing goes beyond the traditional Airport Improvement Program (AIP) funding.

The facilitation of operations, sustainment of operations, and growth of the airport depends upon a P3 partner who has a funding partner.  SPA Global cherishes its financial relationships, particularly with Crito Financial and other firms.  We know the value of capital and through the effort of our key counsel, we structure partnerships,  P3 transactions, negotiation of contracts, licenses and agreements, development of requests for proposals, and monitoring of private operators to ensure compliance with regulatory and contract requirements.

Our financing options are vetted by counsel ad along with our financial partners, are presented to the airport owners and stakeholders.  One of the best alternatives is to understand the tax code as applied to P3s. I

In an excerpt from JD Supra and Bracewell LLP’s article below, we see the power of applying 63-20 Financings to support P3s

General Overview of 63-20 Financings

In Revenue Ruling 63-20 (from which the oh-so-creative “63-20” financing gets its name), the IRS ruled that, in certain circumstances, bonds issued by a nonprofit corporation (the “Nonprofit”) will be considered issued on behalf of a Governmental Unit – thus allowing the interest on such bonds to be eligible for tax-exempt treatment. The IRS provided additional detail with respect to the requirements of a 63-20 financing in Revenue Procedure 82-26, described below.  Although the rules applicable to “traditional” tax-exempt governmental financings continue to apply (limitations on private business use, arbitrage and rebate, etc.), a 63-20 financing may help avoid certain political and legal hurdles that otherwise might be present if the Governmental Unit were to issue the bonds directly.

While 63-20 financings can be used in the context of a P3. A 63-20 financing could result in lower overall project costs (and consequently availability payments) as a result of the lower financing costs obtained by the tax-exempt interest rate while incentivizing the private sector to invest capital and to assume long-term management responsibilities for the relevant assets.

Reference: (https://www.jdsupra.com/legalnews/an-alternative-structure-for-certain-p3-49361/)

This funding mechanism is available in the marketplace.  There are many other funding vehicles,  We will make use of each type where the type of funding is applicable and financially advantageous to the P3.

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