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36 comments on How To Get A Pipeline Built

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LJR on August 29, 2007 - 11:28am Permalink | Subthread | Comments top

Jerome,

Who provides risk assessment for the bonds that finance these projects? The usual suspects?

Some number has to be put on tail events such as nationalization of facilities - think Chavez - in order to sell the paper.

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Jerome a Paris on August 29, 2007 - 12:45pm Permalink | Subthread | Parent | Comments top

Oh God, not bonds. You need old fashioned loans.

Bonds are a very dangerous way to finance such projects, because of their lack of flexibility if there is any need to restructure or renegotiate terms for any reason.

I'm adamantly hostile to bond finance for such projects. I expect to write a post on how such projects are financed by banks, and assessed by them later, because it's a big topic.

But as to the question of who assesses for the debt, that would be me and people like me in our little island in the banking world called project finance.

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