RedRidge Diligence Services explores the latest trends in trade and project finance due diligence in TXF

Growth in regulation impacting lending, along with rapid globalization have put pressure on capital providers’ due diligence capabilities. Pair this with the inherent complexity of trade and project finance transactions and it is clear why many capital providers are now choosing to outsource their due diligence. Matt Reed, Associate Director at RedRidge Diligence Services, explains the trends in the sector.

Read the full article here

Will the Private Finance Initiative (PFI) model be restored under a new guise? S&P Global Ratings’ report covered by the specialist press

On October 29th the U.K. government announced that the Private Finance Initiative (PFI) model for future projects will no longer be used – potentially making a significant shift for the means through which public projects are funded.

However, a new report published by S&P Global Ratings suggests that any resultant financing routes are unlikely to be game changing. Instead, they believe PFIs could still be used, albeit under a different guise.

Following Moorgate’s outreach, FT advisor , TXF News, and Public Finance covered the news.

Proposition 112: S&P Global Ratings outlines the credit negative impacts for Colorado-based utilities before critical vote; covered by the specialist press

On the recent November ballot, Colorado’s citizens voted against measures that would have changed the nature of the state’s oil and gas development. Before the vote’s defeat, S&P Global Ratings published a report outlining the possible risks for energy exploration and production (E&P) companies, should the proposal be made law.

Proposition 112 would have required that E&P companies extend well setbacks (the permissible distance between a wellhead and surrounding structures) from 500 feet to 2,500 feet. This distance would have, in effect, rendered 85% of the state unusable for oil and gas drilling. By some estimates, this could have decreased the state’s GDP by some US$26 billion annually by 2030.

Michael Grande, director, S&P Global Ratings, said: “Passage of Proposition 112 is clearly a credit negative for the energy companies we rate, and it will affect some companies more than others.”

Following Moorgate’s outreach, Upstream (behind a paywall), Oil Voice, and Oil Gas Journal covered the news.

In Construction news, S&P Global Ratings’ Joest Bunse explains how PFI’s successor may look remarkably familiar

The U.K. government’s recent budget marks the beginning of the end for the Private Finance Initiative (PFI) and Private Finance 2 (PF2). While the government plans to honour all existing contracts, the model will not be used going forward.

But is this likely? In an article for Construction News S&P Global Ratings’ associate director, Joest Bunse, explains how the end of PFI may not create markedly different financing options, after all.

Following Carillion’s collapse PFI contracts have come under heavy fire. But, the public sector allocating risks to the private sector makes sense, argues Bunse. This is especially true in the U.K., which boasts the largest and arguably most efficient public-private partnership (PPP) market in Europe. As a result, PFI – the U.K.’s PPP model – will likely continue albeit in a different form and under a different name.

Read the article here (behind paywall).

S&P Global Ratings’ Anne Selting speaks to Partnerships Bulletin about America’s ageing infrastructure

Anne Selting, analytical manager, infrastructure and renewables, S&P Global Ratings, discusses the ongoing concerns surrounding U.S. infrastructure maintenance in Partnerships Bulletin.

Following the devastating collapse of the Morandi Bridge, Italy, ageing infrastructure around the world has attained a highlighted focus. In 2016, 56,007 bridges across the U.S. were deemed structurally deficient, yet state and local governments are deferring maintenance on critical infrastructure assets “due to a lack of standardized reporting”, according to S&P Global Ratings.

Despite cross-party support, Selting believes that a coherent federal infrastructure plan is absent. And, though maintenance budgets are set at a federal level, a disconnect exists because infrastructure is predominately maintained at the state, local and municipality level.

Selting says: “The economy has recovered. So if we now have a recessionary environment, it will be tough to have this conversation. We are somewhere at the end of the credit cycle and have not really seized the moment to come up with an infrastructure plan. We have missed a window.”

The full article can be read online here

ExWorks Capital’s Chris Ash outlines to Trade Arabia how value can be added in Middle East trade finance

  

Christopher Ash, the Managing Director of ExWorks Capital UK describes how trade finance in the Middle East is at an inflexion point. As the discipline innovates and evolves, it becomes a tool to help businesses grow, rather than being a heavy weight in the firm’s debt repayment schedule. There’s still much to be done but also much to gain. Ash outlines some exciting developments that are driving change throughout the region.

Read the full article here

S&P Global Ratings’ Mar Beltran discusses the growth of infrastructure credit in Infrastructure Investor

In 1991, rated corporate and project finance infrastructure issues totalled 355. By 2016, that number had grown to 1,440 – with both project finance and corporates continuing to attract ever greater amounts of financing. In a commentary for Infrastructure Investor, Mar Beltran, S&P Global Ratings’ senior director and infrastructure lead, EMEA, explains the evolution of infrastructure credit over the past three decades or so.

In addition to market growth Beltran believes that infrastructure credit has become more robust, too. Over the past two decades, S&P Global Ratings’ cohort of rated infrastructure credits has enjoyed lower default rates and rating volatility, and higher recovery prospects than non-financial corporates (NFCs), or those involved in the production of goods.

Read the article here (behind paywall).

How might autonomous vehicles affect car parking infrastructure? S&P Global Ratings’ Stefania Belisario answers questions from i3

In an interview with Institutional Investing in Infrastructure (i3), Stefania Belisario, associate director, S&P Global Ratings, discussed the credit implications for car parks that may follow greater market penetration of autonomous vehicles and ride sharing.

Belisario believes that the increasing use of ride-hailing services, such as Uber, and car sharing could displace individual car ownership – and, in turn, reduce car parking demand. Moreover, the development of electric and autonomous cars will likely modify the services that car parks will need to provide in the long term and may restrict car parking demand.

That said, car park operators can still act to futureproof their investments, with operational efficiency improvements a likely avenue. Belisario forecasts “operators’ profitability measures [to] remain at least stable, provided that they are unaffected by any overseas investment or by any changes in their corporate perimeter.”

Read the full article here.

S&P Global Ratings explores rising political and regulatory risk in its latest edition of Infrastructure Finance Outlook magazine

S&P Global Ratings has published its latest edition of Infrastructure Finance Outlook – the quarterly newsletter reviewing the global infrastructure sectors’ key new stories.

Focusing on the rise of political and regulatory risk across the world, this quarter’s Infrastructure Finance Outlook provides global insights from S&P Global analysts on topics including: Brexit’s role in shaping the future of air travel between the U.K. and E.U; whether India can close its infrastructure gap; the path for multilateral lenders looking to increase their engagement with the private sector; as well as the growing importance of ESG factors for infrastructure investment.

Read the latest edition here

Moorgate compiles, edits and designs Infrastructure Finance Outlook.

S&P Global Ratings assigns “A-“rating to US-Canada bridge bonds

The Bridging North America General Partnership (BNA) is set to build a 2.5 km bridge connecting Canada and the United States over the Detroit River. S&P Global Ratings recently assigned a preliminary ‘A-‘ rating to the US$350.9 million in medium to long-term bonds that will help to finance the crossing, known as the Gordie Howe International Bridge.

Following Moorgate’s research, Construction DiveInfraPPPWorld, IJGlobal, InfraNewsand Partnerships Bulletin  covered the news.