How Project Bonds Can Release Resource Value
Although project bonds have for some time been a common way to obtain financing for projects in the usa, they have previously been slow to attain momentum in other locations around the world, like the Middle East.
Numerous explanations are actually advanced with this particular – within the center East, the deep pool of bank market liquidity for Middle East projects, supplemented by funding from export credit confirming agencies and development banks, has generally been sufficient to fulfill financing needs.
However, more recently, project sponsors are becoming increasingly more dedicated to the requirement to release bank lending capacity which can be guaranteed in operational projects, to have the ability to fund the building of new projects. Concurrently, institutional traders (particularly US-based pension funds, resource managers and other investment funds) have dedicated to emerging market project bonds just like a extended-term resource class that meets their extended-term liabilities profile, and will be offering a far greater yield than might be accomplished inside the low interest rate rate atmosphere prevalent in developed marketplaces.
These 4 elements have brought to some restored impetus for your project bond market within the center East, as highlighted with the recent Shuweihat 2 project bond issuance.
On the development of project bonds within the center East here.