The Impact Of Credit Tightening On Infrastructure Investments
- Topics:
- Asset Management
- Source:
- Mercer
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Overview: Overall, in the near-term infrastructure investments are unlikely to be negatively impacted by the widening in credits spreads. This is due to the relatively low level of gearing (in the listed sector), long-debt profiles and the high level of hedging that exists in the current debt structures of infrastructure companies. However, the investment environment has changed. Over the past year-and-a-half both listed and unlisted infrastructure has been affected by the strong M&A activity which pushed up the valuations (largely for the benefit of listed companies that were taken over by unlisted infrastructure funds). With the recent repricing of risk, the cost of doing business has increased and valuations have come down to more reasonable levels. These will make some marginal investments less attractive.
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Format: HTML | Date: Jan 2008 | Pages: 5
