S&P Global Ratings has published its latest edition of Infrastructure Finance Outlook – the quarterly newsletter reviewing the global infrastructure sectors’ key new stories.
Changes in regulations and advances in technology have plunged the infrastructure sector into a period of disruption. In this edition, S&P Global Ratings discuss the credit risks and opportunities that the rise of autonomous vehicles and smart cities present to investors and issuers – as well as how political and regulatory risk and sustainable finance initiatives are evolving.
Moorgate compiles, designs and edits Infrastructure Finance Outlook.
Read it here.
Speaking to BBC Business Live, Chris Southworth, ICC Secretary General, explains that the expansion of Heathrow Airport and approval of a third runway was exactly what British businesses needed to remain competitive, especially following Brexit.
Countering claims that investment should have gone to regional airports instead, Southworth said it was not a case of “either or” but of “both and” – with a pressing need for the UK to invest in all its aviation infrastructure to support trade and economic growth.
“An expanded Heathrow will increase the UK’s ability to develop international trade links with the rest of the world, particularly with emerging markets. New routes, connections and cargo capacity will benefit businesses of all sizes and sectors in every region” Southworth further stated.
Watch the full interview here.
Bazalgette Finance has issued £175 million of index-linked green bonds to fund its Thames Tideway Tunnel (TTT) in London. S&P The financing has received an S&P Global Ratings’ Green Evaluation score of E1/95.
Noemie de la Gorce, analyst in S&P Global Ratings’ sustainable finance team said that the S&P Global Ratings’ high green evaluation score includes the “positive environmental impact from the increase of available fresh water in the tidal Thames from wastewater treatment, as well as carbon savings.”
This news was covered in Waterbriefing, Utility Week, IJ Global, Better Society, Environmental Finance (please note the paywall/login for the last three websites).
S&P Global Ratings’ senior director and lead for Infrastructure EMEA, Mar Beltran, has warned airport operators of the future disruption in the face of evolving trends in the retail and mobility industries.
In an article for Airport Business, Beltran explains that technological disruption from online retail outlets and ride-hailing apps are threatening airports’ commercial and ground transportation business models.
Read the full article pages 14-15 of Airport Business (May 2018 edition). Aviation Pros reprinted the article here.
In recent years, the rated infrastructure universe has largely grown without interruption as increasing levels of capital flows to the sector.
In a post for the World Bank, Mar Beltran, S&P Global Ratings’ senior director and sector lead for Infrastructure, EMEA, explains why.
Read the blog here.
Airport operators in America face a dilemma: air passenger volumes might be increasing but revenues per passenger are falling. And there may be future challenges, too. The rise of both ride-hailing apps and online shopping outlets could cannibalize parking and commercial revenues, respectively.
Mar Beltran, S&P Global Ratings’ sector lead for infrastructure, EMEA, outlines how management teams could respond for Airport Improvement.
“How airports position themselves ahead of these challenges and opportunities will be crucial to remaining profitable,” writes Beltran. “By boasting a diverse range of airlines and high capacity levels—alongside favourable regulatory conditions and a willingness to embrace consumer changes—they can continue to thrive.”
Read the article here.
S&P Global Ratings’ 2018 transportation sector trends report concludes that the industry must adapt to technological and mobility disruption, which presents both risks and opportunities for operators.
The report provides an outlook for operators of ports, airports, toll roads and car parks. S&P believes that these sectors are stable, though operators should look to exploit growth opportunities that arise from market changes. Notably, the advent of electric and automated vehicles and ride-hailing apps may require road and car park operators to modify their business models.
The report was covered by Port Technology and InfraNews.
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.
In its “Industry Top Trends 2018” report for the transportation industry, S&P Global Ratings highlights the shipping industry’s exposure to fluctuating demand for coal and minerals, congestion and regulatory risk as the three most prominent considerations for port assets.
Despite the potential challenges ahead, Mar Beltran, senior director and sector lead for infrastructure, EMEA at S&P Global Ratings, told Port Technology: “We forecast that port infrastructure could continue to display strong credit profiles and a stable outlook.”
Read the article here.
Noemie De La Gorce, S&P Global Ratings’ primary analyst on the recent 2018 green bond outlook, Green Bonds Issuance Is Expected to Shoot Up Further, spoke to Environmental Finance about her findings.
De La Gorce noted that – after playing a key role in the take-off of the green bond market – development banks “now appear to be on the decline, representing 11% of labelled green bond issuance in 2017, compared with 60% in 2013”. She told Environmental Finance: “Although we believe that development banks are likely to remain important issuers in the market, we think that their role is likely to shift, from market leaders to market supporters, providing financing for more risky investments.”
De La Gorce also expects that green securitisation is a trend that will attract a lot of attention this year. “Green securitisation is one of the emerging instruments for green financing,” De La Gorce added. “It generally allows smaller-scale assets to be pooled to reach large capital-market investors. It can therefore provide a suitable mechanism for pooling green loans or mortgages for green buildings, so that banks can take them off their balance sheets.”
To read the segment in Environmental Finance’s Green Bond Round-Up, please click here.