- Standardizing Project Finance Structures And Enhancing The Transparency Of Project Debt
Given the magnitude and long-term illiquidity of infrastructure investments, transparency is especially important to the development of long-term project bond markets. Greater standardization of transaction structures enhances market visibility and predictability.
- Streamlining Regulatory Regimes And Minimizing Political & Regulatory Risk
Inconsistent or inappropriate regulatory regimes can impede further development of institutional infrastructure financing. For example, Europe's Solvency II framework doesn't account for the favorable default and recovery characteristics of infrastructure project finance. This could discourage and even penalize insurers for holding long-dated, low- to-mid-investment-grade project debt. Further, enshrining independent, stable, and transparent regulatory frameworks in law reduces the risk of subsequent adverse policy changes impacting transactions.
- Enhancing Credit Structures And Reducing Construction Risk
With weakened credit quality of some public sector counterparties, the infrastructure finance market has struggled to find support structures that meet both equity investors' rate of return requirements and investor demand for higher-rated bonds. This problem highlights the growing importance of robust public-private partnerships – or "P3s," which include some level of private investment and a transfer of risk to the private party.Mr. Peterson's address at the Capital Markets Summit will be webcast. Visit https://www.uschamber.com/event/8th-annual-capital-markets-summit to view the speech. About McGraw Hill FinancialMcGraw Hill Financial is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 29 countries. Additional information is available at www.mhfi.com. Investor Relations: http://investor.mhfi.com Get news direct from McGraw Hill Financial via RSS: http://investor.mhfi.com/phoenix.zhtml?c=96562&p=rssSubscription&t=&id=&