Of the private capital multilateral lenders have mobilised, only 3% has been invested in low-income countries. This is according to new research by S&P Global Ratings.
The lacking capital is due to the higher underlying investment risks in emerging markets – such as political and regulatory uncertainty, currency exchange risks, and policies that are less clearly defined. S&P Global Ratings believes that a combination of credit enhancements and private-sector catalysation could help to offset the financing gap.
Following Moorgate’s outreach, the news was covered by Infrastructure Investor. To read the full article, click here (please note that the article is behind a paywall)
The reality of Brexit is starting to bite the U.K.’s airports, S&P Global Ratings believes .
The rating agency reports that, without access to the European Common Aviation Area after Brexit, the U.K.’s air traffic rights could become uncertain. An interruption to EU-U.K. air traffic lasting longer than three months would likely trigger negative rating actions (downgrades or revised outlooks) across S&P Global Ratings’ portfolio of rated U.K. airports.
Following Moorgate’s outreach, InfraNews, IPE Real Assets and Infrastructure Investor covered the news. Note that some articles appear behind paywalls.
Following the collapse of Carillion, S&P Global Ratings’ senior director and lead for Infrastructure EMEA, Mar Beltran, has warned against the temptation for construction companies to slacken their risk management policies in an ever competitive market.
In an article for BRINK News, Beltran explains that thinning margins have caused many construction companies to aggressively underbid for projects, forcing them to shroud their debts within their balance sheets. Beltran instead advocates transparency, with a focus on moving towards low leverage and a solid liquidity profile.
Read the full article here
Before its eventual collapse, Carillion mislabelled its financial liability to banks as “owed to creditors” rather than “borrowing”. According to the UK parliamentary committee investigating its demise, this allowed the company to avoid negatively affecting its debt-to-equity ratio and to prolong its survival.
In a recent statement, Mar Beltran, senior director and lead for Infrastructure for EMEA at S&P Global Ratings, explained that Carillion’s extensive use of the U.K. Government’s supply chain finance (SCF) scheme was largely culpable for hiding the company’s fragile financial status – and that companies should look to adopt more transparent accounting practices.
The news was covered in Partnerships Bulletin, FM World, Credit Strategy, FM Industry, City AM and Construction Manager.
To keep temperatures from rising 2˚C above pre-industrial levels, green infrastructure needs significant investment. Michael Wilkins, Head of Sustainable Finance for S&P Global Ratings, discusses where that money is going to come from – and considers both public and private sources.
Read the full article here
The South and Southeast Asia region (SSEA) is embarking on many of the world’s most intensive infrastructure projects. The Asian Development Bank estimates that SSEA will spend a total of US$9.5 trillion on infrastructure between 2016 and 2030.
Given this critical period of development, S&P Global Ratings’ director of Asia Pacific Corporate Ratings, Abhishek Dangra, analyses the outlook for the region’s infrastructure players in BRINK Asia.
“We believe infrastructure companies based in Singapore, Malaysia, Thailand and the Philippines,” Dangra writes, “could feature among the most robust market participants.”
Read the article here.
Sustainable infrastructure is key to the low-carbon transition, argues Michael Wilkins, Head of Sustainable Finance at S&P Global Ratings in a blog contribution for the Centre for the Understanding of Sustainable Prosperity (CUSP).
Infrastructure can both mitigate the effects of climate change and help protect communities from its effects. In both cases, this works to ensure a sustainable, prosperous economy. Yet to meet environmental and infrastructure targets, financing is crucial. Wilkins considers how the flow of sovereign and private capital can actively support the construction of both low-carbon and resilient infrastructure.
To read the full piece, please click here.
Prior to the financial crisis, Australia enjoyed a decade of promising infrastructure projects. Privatizations of the country’s four major airports, along with extensive highway construction, were infrastructure successes.
But – tempered by construction difficulties, overambitious project forecasting, and highly aggressive financial structures – Australia suffered multiple high-profile defaults. Coupled with the financial crisis, the country’s infrastructure project pipeline came to a standstill.
In an article for Brink Asia, Mar Beltran, S&P Global Ratings’ senior director and infrastructure sector lead, EMEA, describes Australia’s infrastructure turnaround. By employing alternative financing tools, the State of New South Wales (NSW), in particular, has overcome many of the legacy issues that were negatively affecting its infrastructure development.
Beltran says: “NSW’s infrastructure story can provide lessons to other markets: alternative financing models are available and can help to bring market confidence to institutional investors, who will be encouraged to see a strong project pipeline across the sector.”
Read the article here.
Mar Beltran, Senior Director, contributed to the FT Adviser’s special report entitled “How retail investors are getting into infrastructure”. The four-part series looks at how infrastructure stocks perform compared to other equity markets, the yield opportunities in infrastructure, the regions most likely to benefit from increased spending and whether investors should be positioned in domestic or global infrastructure stocks.
To read the full series, please click here and use the navigation tool at the bottom to scroll through the different articles.
Between 2006 and 2016, air traffic surged across Latin American nations; the average growth rate was triple the region’s GDP growth. This caused several airports in the region to reach maximum levels of capacity sooner than originally projected – and intensified calls for airport extension and upgrades.
In an article for InfraLatinAmerica, S&P Global Ratings director, Candela Macchi, argues that Latin American airports are still performing above expectations. She says: “Even in countries where we expect GDP growth to vary between 2% and 3% in the coming years, projects may initially see slightly lower air traffic performances than in the past five or ten years due to their restrained capacity. But, in the mid-to-long term, we expect their performances to improve, though their elasticity to growth (relative to GDP growth) may not be quite as high.”
To read the full article, please click here (subscription required).
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