This paper drawn from the EDHECinfra /LTIIA Research Chair shows that common risk factors found in numerous asset classes explain the evolution of unlisted infrastructure secondary market prices. It also shows that after a long period of prices increases, “peak infra” may already be behind us.
Cash Flow Dynamics of Infrastructure Project Debt: Empirical evidence and dynamic modelling
The objectives of this paper are to document the statistical characteristics of debt service cover ratios (DSCRs) in infrastructure project finance, and to develop and calibrate a model of DSCR dynamics. Advanced stochastic modelling of infrastructure project debt has the potential to considerably improve credit risk measures.
How Much Construction Risk do Sponsors Take in Project Finance?
Using new data, we show that construction risk in infrastructure project finance is well-managed and that project sponsors face very little construction risk compared to the well-documented, systematic and very large costs overruns found in traditional infrastructure project procurement.
Unlisted Infrastructure Debt Valuation & Performance: Theoretical Framework and Data Collection Requirements
This paper is part of an ongoing research project aiming to create long-term investment benchmarks for investors in infrastructure. It is the first valuation and risk measurement model created specifically for unlisted infrastructure debt instruments.