Contract risks and credit spread determinants in the international project bond market
Mansoor Dailami, Robert Hauswald, World Bank Institute. Governance, Regulation, and Finance Division
World Bank, World Bank Institute, Governance, Regulation, and Finance Division, 2001 - Business & Economics - 48 pages
In infrastructure projects bondholders and shareholders share residual risks over time despite debt covenants meant to mitigate risk shifting. For projects accessing international bond markets to benefit from longer maturities and lower borrowing costs, it is therfore necessary to pay attention to such design features as capital structure, guarantees, off-take agreement, and project economics.
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basis points bilateral monopoly bond covenant bondholders cash flow Coefficient Coefficient Coefficient Coefficient P-Value Coefficient contagion contingent debt service contractual incompleteness contractual risks contractual structure crude oil debt service guarantee debtholders dependent variable economic effects emerging debt market emerging market explanatory variables firm Gas credit spreads global bond global project Goldman Sachs Greg Randolph impact indeterm interlocking contracts investors Kepco credit spreads Kepco spreads Kogas Korea Korean Won KORELES KORELES(-l KOSPI Laffan Liquefied Natural Liquefied Natural Gas logarithm nexus of contracts non-contracted risks off-take agreement OS/Si output buyer P-Value Coefficient P-Value P-Value P-Value P-Value price contingent debt project bond market project finance purchase agreement Qatar Ras Gas bond Ras Gas credit Ras Gas project Ras Gas spreads Ras Laffan Liquified residual risks RGS KORELES RGS RGS RGS risk factors risk shifting riskiness Russian financial crisis significant specifications Standard and Poor's unit root Variable RGS yield spreads