S&P Global Ratings has published two comprehensive studies of defaults and recoveries in the infrastructure sector.
The first report found that infrastructure sector experienced net positive rating movements in 2017, with 114 upgrades and 87 downgrades – reversing the negative trends seen in 2015 and 2016.
The second report, which explores defaults and recoveries between 1995 and2016, found that the 10-year cumulative default rate for unrated project finance bank loans was 6.3%, though this figure drops to 5.85% when only core sectors are considered. The default rate is lower still for public-private partnership (PPP) projects, including the U.K.’s PFI scheme (5.6%), which according to S&P demonstrates these schemes’ comparatively lower-risk nature.
The same report also concluded that the annual default gap between OECD and emerging markets has narrowed over the past decade – a probable result of the financial crisis, which affected advanced economies more.