European Infrastructure Finance Yearbook - Investing In Bonds ...

More documents

Recommendations

Info

CONTENTS 2 ■ NOVEMBER 2007 CONTENTS CONTD. Summary analyses Copenhagen Airports A/S 85 Deutsche Bahn AG 86 DP World Ltd. 87 Sanef 89 VINCI S.A. 90 Project Finance and Public-Private Partnerships 92 Updated Project Finance Summary Debt Rating Criteria Terry A Pratt, Ian Greer, Arthur F Simonson, and Lidia Polakovic 93 Credit FAQ: Accreting Debt Obligations And The Road ToInvestment Grade 105 For Infrastructure Concessions Paul B Calder, Kurt Forsgren, Ian Greer, and Lidia Polakovic Credit FAQ: The Evolving Landscape For Subordinated Debt InProject Finance 116 Andrew Palmer, Kurt Forsgren, Terry A Pratt, Paul B Calder, Lidia Polakovic, and Santiago Carniado Credit FAQ: Recently Upgraded Nakilat Provides Case Study For Credit 122 Analysis Of LNG Shipping Projects Karim Nassif, Terry A Pratt, and Michael Wilkins Standard & Poor’s Methodology For Setting The Capital Charge OnProject 126 Finance Transactions Lidia Polakovic, Parvathy Iyer, Arthur F Simonson, Dick P Smith, and David Veno Sweden Moves Closer To PPP Model As Alternative Financing For 129 Infrastructure Assets Lidia Polakovic, Karin Erlander, and Michael Wilkins Summary analyses Abu Dhabi National Energy Company PJSC 132 Autoroutes Paris-Rhin-Rhone 133 Metronet Rail BCV Finance PLC/Metronet Rail SSL Finance PLC 136 Peterborough (Progress Health) PLC 138 Transform Schools (North Lanarkshire) Funding PLC 142 Ratings List 144 Key Analytical Contacts 149 STANDARD & POOR’S EUROPEAN INFRASTRUCTURE FINANCE YEARBOOK
INTRODUCTION 2007: New Challenges And Threats, But Sector Remains Robust The year 2007 marks Standard & Poor’s Infrastructure Finance Ratings group’s 10th anniversary. I am therefore delighted to introduce this year’s European Infrastructure Finance Yearbook, in which we discuss the continuing evolution of the asset class and highlight the year’s key transactions, sectors, and trends. In addition we set out the latest developments in our ratings criteria and methodology. We have also taken the opportunity to look back over the decade and examine the phenomenal growth the asset class has experienced as well as the challenges it has faced. In accordance with the past few years, throughout 2007 infrastructure has remained a highly sought after asset class in the financial markets, continuing to attract new investors with its reputation for low volatility and high stability. Yet, with this sustained growth in appetite has come a simultaneous push on the boundaries of infrastructure finance--with investors eager to pay higher acquisition multiples and employ novel financing techniques to purchase infrastructure assets. Consequently, the level of credit risk across the sector has escalated, as debt multiples have continued to creep upward. In particular, Standard & Poor’s has witnessed an increasing number of infrastructure assets being purchased using a new form of acquisition financing in the debt markets. When acquiring both traditional assets, such as water and toll roads, and nontraditional assets, for example motorway service stations, participants are increasingly combining project finance structuring techniques with covenants prevalent in corporate-style leveraged finance facilities. Standard & Poor’s believes such structuring techniques can involve significantly more credit risk than is usual among previous infrastructure finance transactions, as favorable debt terms are often coming at the expense of necessary protections. Consequently, we have warned market participants that, as credit markets become increasingly tight-as has been the case in the second half of 2007--some of these more loosely structured and highly leveraged acquisition loans may find it hard to attract lender and investor interest. Nevertheless, we have also been keen to highlight that for well-structured infrastructure finance transactions funding traditional infrastructure assets--such as the Thames Water refinancing transaction--investor appetite looks set to remain, due to the assets’ strong credit quality. For this reason, such transactions are likely to show significant resilience in the face of the current market volatility. Indeed, such stability has been the case for infrastructure assets throughout the past decade, despite substantial market shocks. Notably, Standard & Poor’s has analyzed the project, utility, and transportation sectors through numerous difficult environments--such as the Asian crisis that threatened many credits across the region in 1997, as well as the California power crisis, Enron Corp. bankruptcy, Brazilian energy crisis, and events of Sept. 11, 2001, all of which placed ratings under downward pressure in later years. Despite such pressures, on the whole, project and infrastructure credits have remained robust in the longer term, and the credit trends of the past decade illustrate the strength of the infrastructure sector. Unsurprising, therefore, that the market has continued to expand--with the booming global economy driving demand for supporting infrastructure. Consequently, the demand for Standard & Poor’s ratings has similarly grown in the sector, with the number of global project finance ratings alone reaching 304 in total at the beginning of this year, a dramatic increase from the 93 we rated in 1997. The articles within this year’s European Infrastructure Finance Yearbook reflect this continued development of the infrastructure market. We discuss the growth in project, utility, and transportation finance transactions in new jurisdictions--such as Russia and Eastern Europe--as well as our approach to rating increasingly complex structuring techniques. Importantly, Standard & Poor’s continues to closely follow the trends across the infrastructure sector, extending and revising our criteria to enable the appropriate assessment of risk originating from the new markets, new structures, and new avenues of infrastructure ownership. I therefore hope you find this 2007 European Infrastructure Finance Yearbook of considerable use and we look forward to receiving any feedback or questions you may have on this publication. Michael Wilkins Managing Director and Head of Infrastructure Finance Ratings STANDARD & POOR’S EUROPEAN INFRASTRUCTURE FINANCE YEARBOOK INTRODUCTION NOVEMBER 2007 ■ 3
Page 1 and 2: November 2007 Infrastructure Financ
Page 3: CONTENTS Introduction STANDARD & PO
Page 8 and 9: ject Finance Rating Distribution: I
Page 10 and 11: COMMENTARY Publication Date: Sept.
Page 12 and 13: (Bil. ) 140 120 100 80 60 40 20 0 F
Page 14 and 15: UTILITIES EUROPEAN UTILITIES Once a
Page 16 and 17: UTILITIES approach to ownership unb
Page 18 and 19: UTILITIES 16 ■ NOVEMBER 2007 tran
Page 20 and 21: UTILITIES 18 ■ NOVEMBER 2007 Limi
Page 22 and 23: UTILITIES 20 ■ NOVEMBER 2007 •
Page 24 and 25: Publication Date: osenergoatom (sta
Page 26 and 27: UTILITIES 24 ■ NOVEMBER 2007 Tabl
Page 28 and 29: UTILITIES 26 ■ NOVEMBER 2007 supp
Page 30 and 31: UTILITIES 28 ■ NOVEMBER 2007 pres
Page 32 and 33: UTILITIES 30 ■ NOVEMBER 2007 Tabl
Page 34 and 35: UTILITIES 32 ■ NOVEMBER 2007 The
Page 36 and 37: UTILITIES 34 ■ NOVEMBER 2007 thei
Page 40 and 41: UTILITIES 38 ■ NOVEMBER 2007 Evol
Page 42 and 43: UTILITIES Publication Date: Aug. 29
Page 44 and 45: UTILITIES Publication Date: Nov. 12
Page 46 and 47: UTILITIES Publication Date: Sept. 3
Page 48 and 49: UTILITIES Publication Date: Aug. 17
Page 50 and 51: UTILITIES Publication Date: Sept. 3
Page 52 and 53: UTILITIES 50 ■ NOVEMBER 2007 stro
Page 54 and 55:
Publication Date:
Page 56 and 57:
TRANSPORTATION INFRASTRUCTURE 54
Page 58 and 59:
TRANSPORTATION INFRASTRUCTURE Publi
Page 60 and 61:
Page 62 and 63:
Page 64 and 65:
TRANSPORTATION INFRASTRUCTURE BAA L
Page 66 and 67:
Page 68 and 69:
Page 70 and 71:
Page 72 and 73:
Page 75:
Termination events under the swap a
Page 78 and 79:
Page 80 and 81:
Page 82 and 83:
Page 84 and 85:
Page 86 and 87:
Page 88 and 89:
Page 90 and 91:
Page 92 and 93:
Page 94 and 95:
PROJECT FINANCE/PUBLIC-PRIVATE PART
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 118 and 119:
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
Page 138 and 139:
Page 140 and 141:
Page 142 and 143:
Page 144 and 145:
Page 146 and 147:
RATINGS LIST RATINGS LIST Utilities
Page 148 and 149:
RATINGS LIST Transportation Infrast
Page 150 and 151:
RATINGS LIST Project Finance Name I
Page 152 and 153:
CONTACTS KEY ANALYTICAL CONTACTS Fr
Page 154:
ARGENTINA AUSTRALIA BRAZIL CANADA C
show all

European Infrastructure Finance Yearbook - Investing In Bonds ...

Create successful ePaper yourself

Delete template?

Save as template?