Las nuevas formas familiares y sus patrones de consumo de alimentos

The US capital markets continue to be the deepest source of liquidity for project issuance.

US investors have demonstrated that they are willing to participate in international project financings so long as they are comfortable with the country risk and the structure of the transaction. In fact, from 2004–2006, over half of PF issuance was international

Date Issuer Country of Origin Rating Amount Final/AL Spread

03/29/11 Inkia Energy Ltd Peru B1/BB- 300.0 10NC5 +502.4

11/10/10 Odebrecht Drilling Norbe VIII/IX Brazil Baa3/BBB- 1,500.0 10/8 +370

11/05/10 AES Dominicana Dominican Republic B-/B 284.0 10NC5 +696.7

10/14/10 Lancer Finance Brazil Baa3/BBB- 270.0 6/3 +470

07/23/09 Dolphin Energy UAE Aa3/A+ 1,250.0 10/5.65 +337.5

07/16/09 Ras Laffan LNG 3 Qatar Aa2/A 1,115.0 5 +312.5

07/15/09 Ras Laffan LNG 3 Qatar Aa2/A 500.0 3 +300

07/15/09 Ras Laffan LNG 3 Qatar Aa2/A 6,150.0 10 +325

Note: Data represets 144A non-domestic issuers

Figure 9.8 select issuance from non-Us issuers Source: Credit Suisse, Bloomberg

Figure 9.9 project bonds by location (Us$m) Source: Thomson Reuters Project Finance International

Year total Location

1996 4.8 north America, 1.1; latin America 0.3; europe, 1.2; Middle east & Africa, 1.4 and; Asia, 0.8

1997 7.5 north America, 2.5; latin America, 2.6; europe, 1.1; Australasia, 0.7 and;

Asia, 0.6

1998 9.8 north America, 4.3; latin America, 2.7; europe, 1.3; Middle east & Africa, 0.3; Australasia, 1.1 and; Asia, 0.1

1999 19.9 north America 14.8; latin America, 1.3; europe, 2.4; Middle east & Africa, 0.8; Australasia, 0.5 and; Asia. 0.1

2000 20.8 north America, 11.8; latin America, 4.2; europe, 3.2; Middle east & Africa, 0.2 and; Australasia, 1.4

2001 25.0 north America, 16.4; latin America, 4.7; europe, 0.9; Middle east & Africa, 0.1; Australasia, 0.5 and; Asia, 2.4

2002 13.8 north America, 3.4; latin America, 3.7; europe, 1.9; Middle east & Africa, 0.1; Australasia, 2.8 and; Asia, 1.9

2003 32.1 north America, 10.4; latin America, 7.1; europe, 9.1; Middle east & Africa, 0.3; Australasia, 2.9 and; Asia, 2.3

2004 28.6 north America, 8.8; latin America, 6.3; europe, 8.1; Middle east & Africa, 0.8; Australasia, 3.0 and; Asia, 1.6

2005 27.5 north America, 14.3; latin America, 3.1; europe, 4.7; Middle east & Africa, 2.2; Australasia, 0.8 and; Asia, 2.4

2006 28.7 north America, 7.0; latin America, 2.2; europe, 12.1; Middle east & Africa, 2.8; Australasia, 4.2 and; Asia, 0.4

2007 26.8 north America, 10.0; latin America, 1.6; europe, 10.5; Australasia, 4.4 and;

Asia, 0.3

2008 11.9 north America, 7.0; latin America, 0.9; europe, 3.0; Australasia, 0.3 and;

Asia, 0.7

2009 8.5 north America, 4.5; latin America, 0.2; Middle east & Africa, 3.5;

Australasia, 0.2 and; Asia, 0.1

2010 19.8 north America, 9.4; latin America, 0.4; europe, 3.6; Australasia, 4.6 and;

Asia, 1.8

2011 22.2 north America, 8.4; latin America, 4.7; europe, 5.5; Middle east & Africa, 1.0; Australasia, 1.0 and; Asia, 1.6

project financings funded in the USS markets. International projects have been financed in the US capital markets since the early 1990s. International issuers have been able to access the market in size at various degrees of the ratings spectrum and continue to diversify country of origin.

Conclusion

As investors continue to allocate funds away from money market funds into yield-bearing products such as corporate bonds, the project bond market has tangentially garnered momentum. Recent transactions have enhanced both structural and pricing precedents in the space. This is occurring simultaneously with a period in which investors are continuing to seek diversity across the capital structure in the project financing arena, thereby expanding the demand for project bonds.

As the pricing of financing in both the bank and bond markets becomes increasingly attractive and corresponding investor appetite diversifies while remaining resilient, project finance issuance is expected to expand in many respects (including funding markets tapped, tenor, position in capital structure, form of security, etc.). Given the fact that most project financings benefit from the existence of one or many long-term contracts that support the revenue stream to the project (which is in turn used to service the debt), strong economic downturns have less of an immediate, tangible effect on the project given the long-term, fixed-price nature of many of the contracts. This is not only reflected in new projects, but also the default (and corresponding recovery) rates of outstanding project bonds. The project bond market is anticipated to maintain strength as investment grade capital market liquidity remains strong vis-à-vis the 2008–2009 timeframe. Strong appetite continues to be manifested in reverse inquiry for project paper as asset classes evolve while demand for low risk, stable cash flow projects remains. A strong technical dynamic coupled with strong historical performance has left the project bond market well-positioned to not only solidify, but expand its current footprint.

chapter

10 Insurance Principles in Project Finance

DAvID BOrThwICk

Practice Head, Structured Finance Practice, Marsh Ltd

Introduction

Insurance is a principal means of risk financing but insurance should never be the first line of defence to any risk scenario. The objective should be to allocate the risk to the party best able to manage the risk with insurance as the fall back solution should something go wrong. In reality however, the availability of insurance does facilitate the transfer of risk by making it more palatable.

Insurance is an integral part of a risk management strategy, its most important function being the financing of risk. But insurance is not a substitute for other forms of risk management such as transfer of risk through contract, mitigation and control.

To illustrate the point, it is a principle of insurance that an insured party always acts as if uninsured and an insurer could avoid paying a claim on the grounds that the insured party failed to act prudently to safeguard the property from loss or damage or to mitigate the loss. Some policies have specific undertakings to this effect as a condition precedent to indemnity.

In project finance the lenders have limited recourse against the sponsors of the project company if it is unable to repay the debt and a sponsor has no guarantee that its co-sponsors would step in and rescue the project company should an unfunded, uninsured and unaffordable event occur. Consequently, the project company and its lenders require a risk management strategy that reflects the nature of its business and its financing, and balances the use of insurance to represent the needs of all relevant parties.