We note that yields on the 10- and 20-year gilts have fallen to c.3.4% and c.3.8% respectively, which is in line with the levels they had reached prior to the disastrous mini-budget, with the extreme volatility observed in recent weeks having dissipated to some extent. That said, risk-free rates have increased materially this year and we would expect these to be reflected in upcoming valuations. Whilst the widening of discount rates will reduce NAVs, these moves will be offset to some extent by increased cashflow assumptions, including increased current and forecast inflation expectations, foreign exchange and increased deposit rate assumptions. A further impact from rising rates is on the borrowing costs that these companies may face. Typically, at PPP/PFI and OFTO projects, interest costs at the underlying project level are swapped and fixed out at inception and these assets do not typically have material re-financing risks. Regulated and demand-based assets may have various tranches of debt, and interest costs are again typically fixed or swapped out; whilst the prevailing interest rate environment has a limited effect on current debt costs, there may be some impact on these businesses when existing debt matures and requires re-financing. Revenues earned by regulated assets are typically adjusted by the respective regulators for the market cost of debt at each regulatory review. There is also an expectation that demand-based businesses will be able to pass increased debt costs on to consumers. At 31 March 2022, HICL outlined that two investments, Affinity Water and Northwest Parkway, have refinancing requirements and therefore some exposure to interest rate risk. The debt structure at Affinity Water is published in its annual report and we note that the next material refinancing is a £250m fixed rate bond, which is due to mature in July 2026. Northwest Parkway’s debt is not publicly disclosed; however, we understand from the HICL management that the debt is comprised of fixed-rate, long-term bonds with the first due to be refinanced in 2026. A handful of assets within INPP’s portfolio have refinancing requirements - Cadent, Angel trains, Tideway and BeNEX rail. Whilst there are no material refinancing requirements at Angel Trains or Cadent in the short-term, we note that Cadent has c.€640m of fixed rate debt and c.£520m of index-linked debt that is due to mature in 2024. INPP commented that Cadent intends to mitigate the refinancing risk by undertaking a series of smaller transactions. Cadent issued £300m of senior loan notes last week, although the details are not yet public. The debt structure at BeNEX is not public but we understand from INPP management that, with the exception of a refinancing which is about to complete, there are no material amounts that need to be refinanced over the next few years. In its update on 30 September 2022, 3iN outlined that there were no material refinancing requirements in the underlying portfolio until 2026 and that over 85% of long-term debt facilities are hedged or fixed rate. The infrastructure companies all have revolving credit facilities (RCF) in place, which have historically (with the exception of GCP) been used as equity bridging facilities and therefore only drawn for a relatively short period of time. GCP has used its RCF more structurally in recent years, and debt as a percentage of NAV has ranged between 8% and 15%, with a high of 18% since December 2018. The interest cost on these RCFs is usually charged at a fixed margin above a reference rate such as SONIA, LIBOR or EURIBOR. Given the increase in rates observed this year, the costs of running these facilities have increased materially; therefore, their attractiveness as a bridging tool and, in the case of GCP, as a more structural feature, is lessened in a higher rate environment. We note that GCP has repaid c.£57m of the £156m drawn on its RCF at 31 March 2022. On page 2, we highlight the current position of these RCFs for the companies featured.