Has the recent volatility in financial markets affected the new RCH project?
All of the funds required for the project have already been subscribed and accordingly, the recent deteroriation in local and international financial markets will not affect the delivery of the new RCH or increase the State’s financial exposure to the project. Although recent articles in the press have highlighted Standard and Poors’ downgrading of the credit rating of FGIC, the project’s monoline insurer*, this downgrading is entirely a matter for FGIC and the holders of the bonds there were issued to finance the project. It does not increase or reflect any increase in the risks associated with the delivery of the project or the likelihood of project failure. All payments by the State in relation to the project are fixed (subject only to CPI adjustments) and the State is not liable to compensate bondholders for any loss that may result from the credit downgrading of FGIC. *A monoline insurer is a financial institution that writes insurance policies that commit to pay interest and capi
