Key Point
- Fundamentally, the appetite for infrastructure projects with
secure, stable cash flows, remains strong but it is increasingly
difficult for competing bidders to raise finance.
There have been a number of significant developments in the
infrastructure financing market over the last 12 months. It is
timely to consider how that market is changing and potential future
developments.
Debt finance market
The global financial crisis is having a significant impact of
the financing of infrastructure projects. Credit rating downgrades
for monoline insurers, because of their exposure to highly
structured collateralised debt obligations (CDOs) and the like,
have caused the credit wrapped bond market to temporarily shut up
shop. In addition, banks have become increasingly concerned about
the availability and cost of finance, and are reducing the amounts
which they are prepared to provide to any single project, and the
tenor/period for which it will be
