BRI is a lesson in patience for financial institutions, says Commerzbank in The Asset

Writing for The Asset, Commerzbank’s Agnes Vargas and Hans Krohn assess the opportunities that the Belt and Road Initiative (BRI) may bring for Europe’s small- and medium-sized enterprises, and how they can engage with the project.

While the “first phase” of the BRI – the construction of large-scale infrastructure – largely excludes SMEs across Central Europe, it is the “second phase” – financing and trade opportunities along these revived trading corridors – for which international financial institutions should be preparing.

Given the enormity and volume of the infrastructure projects defining the first phase, it is likely to be some years until these projects will link to enable the second phase’s transcontinental trade flow. So for the time being, European SMEs should treat the BRI as a lesson in patience. In the meantime, advise Vargas and Krohn, financial institutions should take advantage of the time they have to prepare.

To read the full article, please click here (requires subscription).

 

ESG pressures weigh heavily on auto industry, says S&P Global Ratings’ Vittoria Ferraris in Automotive World

As environmental, social, and governance (ESG) considerations continue to be pushed to the fore of investors’ considerations, the automotive industry is feeling the pressure.

Speaking to Automotive World, Vittoria Ferraris, Senior Director, S&P Global Ratings, warns that while the industry has long dealt with pressures relating to the environmental impact of their products, these will be felt more strongly than ever, with growing numbers of climate-related regulation—and subsequent fines for non-compliance—threatening to reduce profitability. What’s more, as ESG considerations proliferate, the automotive sector is increasingly addressing social and governance factors as well.

To read the full article, please click here (behind paywall).

S&P Global Ratings discusses Spanish utilities regulatory review with Infrastructure Investor

Following the announcement of Spain’s National Commission on Markets and Competition (CNMC)’s plans for the new regulatory period, S&P Global Ratings’ Massimo Schiavo and Gerardo Leal gave an exclusive comment to Infrastructure Investor on the impact of the update on the credit quality of utilities in the country.

“This is harsher than we were expecting,” said Schiavo of the regulatory review, which could see revenues reduced by up to 22% for gas distribution and transmission companies.

Please click here for the full article (behind paywall).

ESG awareness can help entities stay ahead of the curve, says S&P Global Ratings’ Michael Ferguson for GLIO

As focus on environmental, social, and governance (ESG) factors increases due to their potential impact on profit margins, Michael Ferguson, Director, Sustainable Finance at S&P Global Ratings, explores some of the most pressing risks affecting infrastructure classes, as well as the ESG opportunities that are being unearthed in the latest edition of GLIO.

“As ESG awareness and disclosure practices take root,” says Ferguson, “entities across the sector could be both better prepared for longer term, emerging ESG risks and able to anticipate strategic opportunities, rather than playing catch-up.”

To read the full article, please click here.

S&P Global Ratings’ Parvathy Iyer delves into Australia’s corporate infrastructure outlook for Infrastructure Investor

For Australia’s infrastructure corporates, a multitude of risks lie on the horizon. Despite boasting years of robust growth, a more subdued outlook emerges for the near-term, driven by increasingly volatile market conditions. And driving growth in the longer term will call for substantial infrastructure investment. It is no surprise, then, that observers might ask: are the country’s corporates well prepared to manage these pressures?

Writing for Infrastructure Investor, S&P Global Ratings’ Parvathy Iyer argues that it seems so.

The key for corporates overcoming softer revenues and a challenging economic climate, Iyer argues, will be timing flexibility. And while Australia’s infrastructure sector has significant capital expenditure in progress or under consideration, companies spanning the airport and port sectors should have some freedom to alter their timing and level of spending in response to the economic climate.

To read the full article, please click here (behind paywall).

S&P Global Ratings’ Mike Wilkins discusses shifting emphases in investors’ treatment of ESG factors for Infrastructure Investor

Prospective investors are increasingly focusing on environmental, social and governance (ESG) factors when making investment decisions. But while, traditionally, focus centred more on environmental factors – given these tend to be more visible than social and governance factors – social and governance factors are becoming more prominent in decision-making, not least because the links between strong governance and company performance is being better understood. That’s according to Mike Wilkins, S&P Global Ratings’ Head of Sustainable Finance, who was interviewed recently by Infrastructure Investor.

“There’s been a refocus on governance as an issue,” says Wilkins. “In our experience, we see governance as having a bigger impact towards the evaluation than the other two components.”

The full interview can be found here (behind paywall).

Inside S&P Global Ratings IFR Outlook H1 2019: Political uncertainty, sustainability and ESG

S&P Global Ratings has published 2019’s first edition of Infrastructure Finance Outlook, its newsletter of key infrastructure and project finance-related research and ratings news.

In this edition, S&P Global Ratings considers global infrastructure investment trends, spanning China, the GCC and the Americas, along with the regulatory and political risk factors across these regions.

With global political uncertainties on the rise, infrastructure investors are even more focused on long-term sustainability. And, as environmental, social, and governance (ESG) considerations are rising to the fore of investment strategies, the credit rating agency dedicates this edition to providing greater insight to its newest offering, the ESG Evaluation.

Please see the full newsletter in PDF here.

S&P Global Ratings’ Gloria Lu and Abhishek Dangra discuss looming volatility in Asian infrastructure market for Brink Asia

S&P Global Ratings’ Gloria Lu, Senior Director of Corporate & Infrastructure Ratings, Asia Pacific, and Abhishek Dangra, Director, Asia Pacific Corporate Ratings, recently discussed the looming volatility shadowing Asia’s infrastructure market for Brink News, offering their own views and potential responses to increasing risks proliferating in the region.

Discussing the refinancing risks that China may face as a third of the market’s debt approaches maturity in the coming months, Lu and Dangra consider some options available to mitigate external pressures, such as political and regulatory reform.

Read the full article here.

S&P Global Ratings’ Julyana Yokota reviews Latin America’s changing infrastructure landscape for Brink News

In a commentary for Brink News, Julyana Yokota, Director of Infrastructure Ratings at S&P Global Ratings, highlights the geopolitical and regulatory risks that are driving a shift in investor sentiment towards Latin American infrastructure.

Yakota considers Brazil, Mexico and Argentina individually, alongside the broader regional landscape, stating that “credit conditions have significantly improved…particularly with regard to utilities’ regulatory stability and transparency.”

The full commentary can be found here.

S&P Global Ratings’ Candela Macchi explores Latam’s infrastructure market growth for Financier Worldwide

Financier Worldwide has published a commentary written by S&P Global Ratings’ Director and Sector Lead in the Infrastructure Ratings Practice in Latin America, Candela Macchi, in which she examines the expansion and resilience of the region’s infrastructure market and the discrepancies between its’ industries.

Emphasising the longevity within this asset class, Macchi predicts that although changes to regulatory frameworks will pose new challenges and unpredictable political landscapes could undermine market confidence, investors may still find comfort in the favourable conditions that traditionally characterize the infrastructure market.

The full article can be found here.