Project Bonds
With apologies to Jane Austen, it is a truth universally acknowledged that the European economy in recession must be in want of greenfield infrastructure, and greenfield infrastructure requires significant private sector debt finance.
However, the availability of traditional sources of debt finance – bank-originated project finance and monoline wrapped bonds - is much more constrained than was the case pre financial crisis; this has resulted from a combination of more conservative bank regulation heralded by Basel III requiring higher levels of capital to be held against project loans and the need for banks to shrink their balance sheets and focus on “core” businesses. In addition, the crisis left a single monoline standing and the sovereign debt crisis has constrained direct funding by governments.
Accordingly, much effort is being focussed on re-opening the debt capital markets for greenfield infrastructure finance and providing a product attractive both to long-term institutional investors and to infrastructure developers and procuring authorities.
Potential solutions range from privately arranged funds such as Hadrian’s Wall Capital and PEBBLE to the UK Guarantees scheme and other state endorsed endeavours such as the EU 2020 Project Bond Initiative. There is a determination in the market to find a way through to assist in kick-starting infrastructure development, and European economy.
Our Project Bonds experience
We have a complete understanding of infrastructure assets, based on years of experience helping clients develop, finance and build them, combined with our core strengths in procurement and regulatory law and our in-depth knowledge at the forefront of bond financing techniques (private placements, s144A offerings, multi-source debt platforms and securitisation structures).
This means we can guide clients through the issues surrounding the predicted re-emergence of project bonds, providing commercial on-market advice with the minimum of legal friction.
