In response to growing demand, especially for infrastructure projects, investors and their financial advisors have sought new sources of financing, and have turned to the bond capital markets to supplement traditional bank financing. Consequently, capital markets transactions, such as 144A bond issues, are playing an increasingly important role in financing projects in emerging markets. The coverage may enable investors to mobilize capital markets funding for transactions where it was previously unavailable.
Non-Honoring of a Sovereign Guaranty
OPIC offers insurance coverage for U.S. lenders (bond capital markets and financial institution investors). The Non-Honoring of a Sovereign Guaranty (NHSG) coverage protects investors if a sovereign government fails to meet its contractual obligation for any reason to “honor” its contractual sovereign guaranty of a debt obligation. NHSG coverage is generally available in countries with a public rating of B/B+ or better. Transactions utilizing NHSG coverage receive the same credit rating as the U.S. Government.