Australia

Details

  • Service: Advisory, Transactions & Restructuring, Corporate Finance, Topics, Infrastructure
  • Industry: Financial Services, Investment Management
  • Type: Business and industry issue
  • Date: 12/09/2013

FORESIGHT: A Global Infrastructure Perspective

FORESIGHT: A Global Infrastructure Perspective
Foresight features global observations and our take on some of infrastructure’s hot topics, trends and issues facing our clients.

FORESIGHT: Death and rebirth of infrastructure debt markets 

Let’s face it: today’s infrastructure development is primarily shaped by cost considerations. Whether it is the cost of debt, the cost of funding or operational costs, project owners, managers and – increasingly – users are fixated on cost.

Three years ago, things seemed bleak for project finance in the infrastructure sector. The monoline funding model had long-since 'died' an inglorious death and few options remained for securing project finance. The credit and liquidity crisis had seriously reduced bank debt lending; institutional investors were hoarding not investing; and governments were refocusing their priorities onto austerity measures.
 
What was clear was that the markets would require some form of credit enhancement vehicle if infrastructure deals were going to continue to be financed and attract institutional investment from the bond market.
What was less clear was how that credit enhancement would be achieved, who would shoulder the risk and under what terms.

 

This edition of FORESIGHT explores project finance in the infrastructure sector and the evolving finance options for investors.

 

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