Using project bonds to finance construction risk

Using project bonds to finance construction risk

Bonds Debt Capital Markets Debenture Funds Project & Infrastructure Finance Structured Finance Features Argentina Colombia Brazil Mexico Peru

The use of institutional investment money to fund greenfield infrastructure projects in Latin America has advanced in recent years, going from a limited amount of financing from infrastructure funds to the growing use of project bonds and more equity instruments. Developers are going after long-term investors in order to reduce their refinancing risks, and now larger deals are coming to market with more competitive spreads and longer tenors. Questions remain, however, about how institutional investors weigh construction risks and how comfortable they are financing new projects. The bond market for infrastructure projects is maturing, bankers say. The increase is modest — bond issues covered

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