We use cookies on our website to enhance your browsing experience. By continuing to use this site without changing your settings you consent to our use of cookies in accordance with our cookie policy. To learn more about cookies, how we use them on our site and how to change your cookie settings please view our cookie policy.

Close Cookie Bar

What have we been up to

NEWS & VIEWS

Donec varius pellentesque metus, at vehicula magna egestas quis. Sed purus ipsum, vehicula id libero laoreet, posuere ornare urna. In eu nulla leo. Nullam pellentesque dolor nec scelerisque consequat.

Project Finance Q1 Deal Digest

image
Share on Linkedin
+ -
If you thought this page is useful to your friend, use this form to send.
Friend Email
Enter your message

The Infrastructure market continues to see steady growth with PPP activity in Europe but with the key focus firmly on the renewables space. The ongoing quest for yield seems to be drawing a wider variety of investors and debt providers into this sector, prompting ongoing competitive lending margins from lenders. 

Most of the activity we have seen in this last quarter has been in Europe, although we are seeing much more activity and focus on Australasia. In addition, there seems to be some ‘promising’ progress being made in South Africa regarding the Eskom embargo on signing approved PPAs and we would like to think that a number of projects will reach close later this year. In regard to new geographies, we are also seeing a greater emphasis elsewhere in Africa and in particular in India, Latam and Asia. We suggest that these areas represent a significant pipeline of future renewable activity.

Closer to home, we are still seeing a significant number of project refinancing’s that are also attracting competitive terms and XVA pricing where required. Many of the larger projects are EUR based albeit we have completed quite a number of smaller GBP transactions representing legacy PFI projects.

The key focus recently has been on the future long term cost of debt. While we do not expect to see much movement in loan margins, underlying long term rates are increasing globally. We have already seen UK rates revert back up to a 0.5% base rate, Mr Draghi has signalled the steady curtailment of QE in the Eurozone and the Fed have essentially promised a further rate rise in the US before Christmas. However, all these economies are keen to point out that any rate increases will be gradual and in small steps, making it very clear that they do not want to spook economies and disrupt the current steady progress. This is all on the back of promising signs of more sustained economic growth, or at least a future improvement where the UK is concerned, which we are indeed beginning to see.

For the future of Infrastructure we do not see this as a material problem. We would not expect long term rates to increase that quickly and alternative asset classes are in the same boat. We still see one key advantage of infrastructure as the long term visibility of its income. There are few asset classes that can offer this with similar levels of risk and return.

 

VIEW CASE STUDY

 

ARCHIVED

RELATED ARTICLEs

European growth doesn't look good - but looks can be

image
8thSeptember 2016

Many corporates are affected by volatility in the US dollar, and those whose budgeting periods will be running during October...

read more

Doubts cast over UK trade as deficit widens

image
11thJuly 2017

A succession of weak economic releases last week failed to produce much of a reversal in the markedly higher levels to which...

read more

How can we help you

Have you got a question about how you hedge your financial risks, or structure and arrange your debt?

Find out how we can help you by contacting us today.

 

contact us

Stay Connected

Would you like news and views on local and global financial markets?

Sign up today to receive news straight to your inbox.

At JCRA the privacy of your personal information is of utmost importance to us. You can find details in our Privacy Policy and Terms of Use.

CLOSE

SIGN UP FOR NEWS

Subscribe