We recently posted Industry Insights interviews focusing on infrastructure financing with Toby Stokes of Aviva and Dominic Nathan of Assured Guaranty discussing the lending options provided by their firms.
In today’s Industry Insights interview Tim shares his thoughts on:
1. how we could get institutional money into deals
2. which countries already have institutional investors active in infrastructure financing and
3. why institutional money is a natural fit with infrastructure lending.</li>
There’s also an interesting article on the potential effects of regulation on both the banks and pension funds ability to lend to infrastructure projects on Infranews (How a Rise in Regulation is Set to Have a Dramatic Impact on Infrastructure Investing by Mike Dunning).
This article explores the negative impact the increase in key capital ratios imposed by Basel III will have on the banks’ ability to lend long term, which would open up the market for institutional investors. In theory this is great news for the institutional investors but unfortunately most don’t have the in house teams in place to structure and manage these types of loans.
In addition to their in house problems, the European Commission is considering applying the Solvency II regulations to pension funds which would limit their ability to lend to infrastructure projects.