Risk Performance Management ("RPM") is a new methodology for creating a synthetic credit enhancement available for project finance.
Enterprise Risk Management ("ERM") is a plan-based business strategy that aims to identify, assess and prepare for any risks that may interfere with a company's goals and objectives.
RPM and ERM together provide a mechanism to leverage the reduction in risk associated with ERM with the transfer of the majority of that risk to rated entities, who then provide certainty as to specified payments such as yield, interest, lease payments and the like. By providing the payment assurance from a highly rated institutional entity, often a world-class insurance company, the overall financing package for a project itself takes on the credit quality attributes of the rated entity providing the assurance. RPM, which includes ERM, creates what is essentially a synthetic credit enhancement available to an eligible project seeking financing from the institutional capital markets.
Although ERM is a well-known tool used by corporations to address and reduce risk, RPM – with its transformational ability – is unique to Broadway Capital.