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A no ppp deals arranged in 2005 distribution of 620

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Unformatted text preview: ities by Distribution Number of Years: 2000-2006 Number Number of Years <5 5 to 9.9 10 to 14.9 15 to 19.9 20 to 25 > Mean Median Bank Loans 26% 38% 19% 10% 4% 4% 9.9 8.0 Bonds 29% 33% 26% 11% 2% 11.6 10.2 10% Sources: Thompson Financial SDC New Securities Issuance Database (bonds) and Loan Pricing Corporation (loans). Number of project loans = 1,443; Number of project bonds = 126 Contract Length: 1994 to 2006 Distribution of Initial Debt-to-Total Capitalization Distribution Ratios by Year: 2002 to 2006 (633 projects) Ratios Debt-to-Total Capital 2002 2003 2004 2005 2006 Total <50% 15% 28% 13% 13% 8% 12% 50%-59% 11 9 10 7 8 9 60%-69% 9 9 10 9 14 12 70%-79% 11 17 22 13 22 22 80%-89% 26 26 23 28 21 24 90% 26 12 22 26 28 21 Total 100% 100% 100% 100% 100% 100% Mean 71% 58% 71% 74% 75% 71% Median 80% 71% 76% 76% 78% 76% Project Finance Lending by Region: 2002 - 2006 Project Amount of Project Lending by Region (US$ Billions) Region 2002 2003 2004 2005 2006 Total 02-06 4 Year CAGR Western Europe $23.36 38% $29.40 42% $25.69 22% $55.13 39% $57.84 33% $191.42 34% 25% Asia 10.61 17 12.44 18 24.85 21 16.04 11 28.42 16 92.36 16 28 Middle East 2.75 4 6.50 9 18.56 16 28.15 20 31.20 15 87.15 15 84 North America 10.32 17 5.55 8 16.37 14 14.39 10 34.96 20 81.60 14 36 Americas 6.22 10 7.24 10 12.59 11 6.59 5 9.05 5 41.69 7 10 Australia /New Zealand 6.06 10 3.81 5 10.73 9 8.92 6 10.79 6 40.31 7 16 Africa 1.32 2 1.90 3 4.96 4 6.36 5 6.09 3 21.74 4 40 Eastern Europe 1.54 2 2.72 4 2.69 2 4.66 3 2.26 1 12.83 2 14 Total 62.18 100% $69.56 100% $116.44 100% $140.30 100% $180.61 100% $569.09 100% 31% Project Finance Lending by Sector, 2002 - 2006 Project Amount of Project Lending by Sector (US$ Billions) Region 2002 2003 2004 2005 2006 Total 02-06 4 Year CAGR Power $20.20 32 $24.07 35 $35.26 30 $44.42 32 $57.11 32 $181.06 32 30 Transpor tation 13.59 22 14.99 22 23.51 20 28.73 20 44.60 25 125.42 22 35 Oil & Gas 6.44 10 9.03 13 22.52 19 24.04 17 26.37 15 88.40 16 42 Petroche micals 5.71 9 5.88 8 8.80 8 6.97 5 20.26 11 47.62 8 37 Leisure & Property 4.76 8 4.44 6 7.00 6 13.28 9 17.25 9 46.76 8 37 Telecom 7.29 12 4.99 7 7.34 6 10.19 7 3.14 2 32.59 6 -19 Industrial 0.82 1 3.18 5 5.23 5 4.13 3 4.23 2 17.56 3 51 Mining 1.00 2 1.11 2 3.57 3 2.46 2 3.31 2 11.45 2 35 Water & Sewage 0.16 0 1.04 1 2.17 2 3.73 3 3.82 2 10.92 2 121 Other 2.21 4 .84 1 1.04 1 2.36 2 0.53 0 6.98 1 -30 Total $62.18 100% $69.56 100% $116.44 100% $140.30 100% $180.61 100% $569.09 100% 31% Project-Finance Bank Loans by Sector and Region Project (US$ Billions), 2002 to 2006 (US$ Sector Europe, Middle East, Africa Asia Pacific Americas 2002 to 2006 Total Percent of Total Power $83.35 38.55 59.15 181.06 31.8 Transportation 72.99 37.75 14.69 125.42 22.1 Oil & Gas 43.68 16.69 15.49 88.40 15.5 Petrochemicals 27.72 15.55 4.34 47.62 8.4 Leisure & Property 37.29 7.83 1.62 46.76 8.2 Telecom 23.50 6.51 2.93 32.95 5.8 Industrial 8.78 4.45 4.27 17.56 3.1 Mining 2.15 3.10 6.19 11.45 2.0 Water & Sewage 8.78 1.28 0.85 10.92 1.9 Other 4.34 1.53 1.12 6.98 1.2 Total $312.58 $133.32 $123.19 $569.09 100% Percent 54.9% 23.4% 21.6% 100% Source: Adapted from Project Finance International, various issues January 2002 to January 2007 Shaded boxes show market segments with the largest amount of bank financing – 5% or more of total amount loaned. Other includes waste and recycling, agriculture, and social infrastructure (e.g., schools, hospitals, prisons) projects. MIT OpenCourseWare http://ocw.mit.edu 1.040 Project Management Spring 2009 For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms. 1.040/1.401 1.040/1.401 Project Management Spring 2009 Project Finance Fred Moavenzadeh Department of Civil and Environmental Engineering Massachusetts Institute of Technology Project Financing Project Main Features Main Economically separable capital investment Economically Cash Flow of the project the main source of the capital recovery Cash Assets of the project is the only source used as collateral Assets No recourse to the assets of sponsoring companies. Unless No specifically required in the contract Debt serving has priority over investors equity Debt During construction, interests on debt is accumulated as part of the During debt. Context: Feasibility Phases Context: Project Concept Project Land Purchase & Sale Review Land Evaluation (scope, size, etc.) Evaluation Constraint survey Constraint Site constraints Site Cost models Cost Siite infrastructural issues S te infrastructural Permit requirements Permit Summary Report Summary Decision to proceed Decision Regulatory process (obtain permits, etc) Regulatory Design Phase Design Finance Finance Investment Firms n Company y uit Equity Project Equity Project Project Finance Eq Company a Lo an Lo ity qu E Company Finance Vs. Project Finance Company Finance Project Finance Capital Formation Will impact debt capacity Will not impact debt capacity, because it is off balance sheet Risk Exposure Could impact overall risk structure or the cost of capital Limited Tax Shield Hard to take advantage of Easier to bundle Cas...
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