Freshfields Bruckhaus Deringer and Linklaters have taken lead roles on the first private finance initiative (PFI) monoline insurance company replacement since the start of the global financial crisis.

The deal has seen Ambac Assurance UK – the guarantor of £97m of senior bonds raised to construct Worcestershire Hospital – replaced after the value of the credit enhancement it provided fell. Assured Guaranty (Europe) and Assured Guaranty Municipal Corporation have replaced Ambac.

Freshfields advised Worcestershire Hospital and Assured Guaranty with a team led by infrastructure partner Alex Carver alongside finance partners Chris Barratt and Duncan Kellaway.

Linklaters acted for the bond trustee, Law Debenture, with capital markets partner Jasper Evans leading the firm's team.

Carver said: "This is the clearest signal yet that parts of the monoline insurance industry still have plenty to offer for infrastructure finance. It is likely that we will see more guarantor replacements over the coming months as project companies and issuers find ways of dealing with the consequences of the financial crisis and the continued credit rating problems of 
certain monolines."

Ambac originally signed an agreement with Worcestershire Hospital – previously Catalyst Healthcare Worcester – in 1999 to guarantee the £97m worth of senior bonds to finance its construction.

However, in the wake of the financial crisis Ambac's credit rating was cut by Standard & Poor's, with the company filing for a voluntary petition for relief under the US bankruptcy code in November 2010.