1、Global Infrastructure & Project Finance March 1, 2010 Special Report Global Infrastructure & Project Finance 2010 Outlook Summary Fitch Ratings sees its global infrastructure and project finance rating outlooks in most sectors stabilizing and in some cases moderately improving in 2010. This follows
2、 two consecutive years where credit outlooks turned clearly negative. The improvement in outlooks is in the context of an anticipated global scenario of gradual economic recovery throughout 2010 and onward. It is also in part a consequence of the rating actions taken so far, which have been mostly n
3、egative to reflect higher levels of credit risk, and the recognition that a further negative shift is therefore less likely going forward. No sector is associated with a positive outlook yet for two main reasons: the pace of the recovery is uncertain, so we do not expect rapid growth in revenues in
4、2010 and 2011, and also projects for the most part still have many years to operate and as a result will go through other cycles in the future. As expected coming into 2009, the world economy endured serious deterioration as the year progressed. The performance of infrastructure assets was, in most
5、instances, known to be correlated with economic activity, but it was also expected to show lower levels of volatility. They have in fact proven quite resilient. Despite many negative rating actions, most were the result of marginally elevated risk, and there were very few that evidenced significant
6、credit deterioration. This is in part due to the fact that project financings are typically structured to cope with multiple downsides through debt-service coverage cushions and financial reserves, but also because these core infrastructure assets retain a significant base of ongoing demand for the
7、essential services they provide. For some sectors that were more heavily impacted by the recession transportation, for example 2009 provided new empirical data on cyclical low points and duration. Fitch does not expect to materially change its rating approach to project finance as a result of the pa
8、st two years observations, but rather to broaden the sets of sensitivities applied in assessing cash flow robustness, where appropriate, when analyzing and rating project debt. Debt structures in Fitchs portfolio of rated projects mostly incorporate amortizing debt and are consequently more dependen
9、t on the strength of operational cash flows than asset valuations. As a result, the key driver for rating stability is cash flow volatility and it is not surprising that sectors that have remained stable are the ones with structurally low volatility such as availability payment structures for social
10、 infrastructure or transportation (which do not have either price or volume risk) and contracted power and energy assets (which have largely mitigated price and volume risk). The most negatively impacted have been those with considerable market exposure, such as merchant power, and those exposed to
11、discretionary spending, such as airports, maritime ports, and pub companies. It is worth noting, however, that projects subject to low revenue volatility tend to be more leveraged, hence reducing the rating differential with more volatile sectors. While only a smaller subset of current ratings is vu
12、lnerable, the increasing exposure to refinance and swap remarketing risks also enhances volatility. Looking forward, macroeconomic risks remain important. Sustained low inflation could impair projects where cash flow projections were based on “normalized” inflation assumptions, and expectations for
13、looming high inflation raise the specter of wider Analysts Regional Contacts Cherian George, Americas +1 212 908-0519 Dan Robertson, EMEA +44 20 7682-7381 William Streeter, Asia-Pacific +65 6796-7224 Olivier Delfour +33 1 4429-9121 Sector Contacts Energy Tim Ononiwu, Americas +1 212 908-9189 Gr
14、eg Remec, Americas +1 312 606-2339 Dan Robertson, EMEA +44 20 7682-7381 Federico Gronda, EMEA +44 20 7682-7464 Transportation/Availability Based Mike McDermott, North America +1 212 908-0605 Alberto Santos, Latin America +1 212 908-0714 Nicolas Painvin, EMEA +33 1 4429-9128 Srinivasan Nanda Ku
15、mar, India +91 44 4340-1710 Robert Zivcic, Australia +61 2 8256-0304 Other Guillaume Langellier, U.K. Whole Bus. +44 20 7682-7563 Chad Lewis, U.S. Sports +1 212 908-0886 Global Infrastructure & Project Finance 2 Global Infrastructure & Project Finance 2010 Outlook March 1, 2010 mismatches if cos
16、t growth outstrips revenue. The pace of economic recovery will impact consumer spending. The volatility and level of commodity prices will impact energy and transportation projects. Major swings in oil and gas prices in particular and the decoupling of oil, gas, and power prices in some markets will
17、 likely continue to result in unexpected outcomes. Counterparty risk remains a factor, especially in projects where macroeconomic volatility is mitigated by long-term contracts with corporate, public sector, and financial institutions. While the credit quality of counterparties was affected during t
18、his crisis, it remained more stable than might have been expected. Therefore, the presence of these contracts provided a measure of stability, and projects ratings were not significantly impacted. A phenomenon to watch is how infrastructure assets in developing economies perform relative to those in
19、 developed economies and whether this recovery will be different Summary of 2010 Rating Outlooks Project Sector 2009 2010 Change Thermal Power Stable U.S. Stable to Negative Latin America Stable India Stable to Negative Renewable Power Stable U.S. Stable EMEA Stable to Negative Latin America Stable
20、Oil and Gas Stable to Negative U.S. Stable + EMEA Stable to Negative Airports U.S. Negative Negative Latin America Stable to Negative EMEA Stable to Negative Stable to Negative India Stable Australia Stable Stable Toll Roads U.S. Negative Stable to Negative + Latin America Stable to Negative Stable
21、+ EMEA Stable to Negative Stable to Negative India Stable Stable Australia Stable Stable Maritime Ports U.S. Negative Stable to Negative + EMEA Negative Negative Availability-Based EMEA Social Infrastructure Stable Stable EMEA Transport Stable Stable Whole Business U.K. Pub Companies Negative Negati
22、ve U.K. Healthcare Stable to Negative Stable to Negative U.S. Sports Stable to Negative Stable to Negative Rating outlook reflects the prospective balance between upgrades, downgrades, and affirmations of Fitch-rated instruments. Source: Fitch. Global Infrastructure & Project Finance Global Infrastr
23、ucture & Project Finance 2010 Outlook March 1, 2010 3 from prior ones. GDP growth in the developed world is likely to be sluggish in 2010. Emerging markets in general have been resilient to the global financial crisis and are expected to recover stronger than the mature economies in 2010. In the inf
24、rastructure space, there is evidence that the adverse credit impacts from the dire global economic decline across most infrastructure sectors has been less adverse than one might have expected in developing economies. This is in part because developed markets are facing the strongest negative headwi
25、nds due to the adverse impact on their economies from the excesses of the financial markets prior to the global financial crisis, and the lack of adequate policy and regulatory controls to avoid mispricing of risk. It is also in part because the sample of infrastructure projects in developing countr
26、ies is small and therefore those that rise to the surface tend to have the strongest economic profiles in the country and are better suited to withstand adverse events, versus the broader proliferation of such projects in the developed world where many with moderate-to- weak economic profiles have h
27、ad good access to the capital markets but are now more vulnerable to downside risk. Other longer term considerations are also at play, such as climate change and the impact of related regulation and market factors on credit quality. While they remain material credit factors, the lack of clarity on h
28、ow they will impact credit quality means that they currently impact rating outlooks, which have a 12 24-month horizon, in only a limited way. Environmental reform and climate change considerations will likely transform the way energy is produced and used, and the modes by which people and goods are
29、transported in the long term. This is one of the most important “known unknowns” in todays world. While the ability to incorporate this risk in a meaningful way is limited, Fitch in its analysis seeks to assess the relative ability of projects to absorb unexpected downside risks and reflect it in it
30、s ratings. The table on page 2 summarizes Fitchs 2010 global infrastructure and project finance rating outlooks. Energy Projects The energy sector has been roiled from almost every angle over the course of the past couple of years as economies floundered, demand dropped, and energy prices varied dra
31、matically. While oil and gas prices have recovered, pricing uncertainty, security of supply, and environmental legislation will continue to affect the markets in which power and oil & gas projects operate for the long term. Merchant plants have been more susceptible to these factors. However, the pr
32、eponderance of projects that Fitch rates have strong and stable contractual arrangements that have allowed them to ride through the storm with less adverse consequences and with their cost-recovery provisions cushioning credit quality. Gas liquefaction projects have performed reasonably well, suppor
33、ted by strong take-or- pay contracts, low break-even prices, and generally oil-linked revenue streams, although liquefied natural gas (LNG) producers selling mainly to the North American market are more exposed to uncertainty regarding future U.S. gas prices. Oil refining and pipeline projects faced
34、 significantly reduced margins from drops in utilization and prices. An interesting contrast to the experience in the developed world is that of many developing countries where the inadequacy of power generation and supply networks had generally suppressed demand, so this downturn has not had an adv
35、erse effect on demand. Available supply was still met with commensurate demand, but the level to which demand outstripped supply just narrowed. Global Infrastructure & Project Finance 4 Global Infrastructure & Project Finance 2010 Outlook March 1, 2010 The renewable power space generally showed more
36、 stability as it benefits from supportive regulatory and policy frameworks. In most cases, the ability to structure around the resource and technology risks associated with these projects created a platform for more stable credit performance through this cycle and going forward. Thermal Power Projec
37、ts U.S. Rating Outlook: Stable to Negative Thermal power generators with long-term off-take agreements have shown resilience to the adverse economic conditions of 2009 and are expected to perform similarly in 2010. The credit profile of competitive generators reliant on spot sales of unhedged power
38、is weaker but not expected to worsen in 2010. Lower demand due to weak economic conditions and excess supply resulted in very low natural gas prices, energy prices, and spark spreads in 2009, but modestly improved pricing is expected for 2010. Exposure to new and increasing environmental compliance
39、costs elevates the risk of reduced cash flow for fossil-fueled generators, and in particular coal-fired projects. Merchant coal-fired generators are particularly likely to continue experiencing reduced levels of cash flow. The 2010 Outlook for most contracted thermal power projects is stable. In 200
40、9, reduced electricity demand due to the global economic downturn and persistently low natural gas prices characterized challenging market environments for power projects. Investment-grade power projects with contracted off-take agreements avoided downgrades in 2009 due to the stability of their cas
41、h flows and are expected to perform similarly in 2010. Facilities with fixed-price capacity payments and tolling arrangements for fuel and energy pricing exhibited the highest degree of cash flow stability. Projects with power purchase agreements where energy pricing is indexed to market prices were
42、 less effective at mitigating market price risk but generally avoided downgrades as well. The 2010 Outlook for competitive generators lacking long-term off-take agreements and selling directly into merchant markets is stable to negative. Hydropower and efficient natural gas-fired generators in this
43、class experienced declines in cash flow and debt- service coverage in 2009 but are not expected to worsen in 2010, with an expectation for modest improvement. Certain non-contracted coal-fired projects experienced dramatic declines in cash flow and erosion in financial cushion available to service d
44、ebt in 2009 and have a negative outlook for 2010. Such projects were subject to displacement on the dispatch curve by more efficient gas-fired facilities, resulting in lower revenues and capacity factors. Energy prices in many U.S. markets are highly correlated to natural gas prices, with natural ga
45、s generators frequently setting the market clearing price for power. Low gas prices combined with sluggish demand resulted in unexpectedly low electricity prices and spark spreads for 2009. Natural gas prices have increased from their lowest levels of 2009, but continue to defy their typical correla
46、tion to oil prices, which have increased significantly in the same period. Gas prices and energy demand are expected to stabilize or improve gradually during 2010, in line with improvement in the overall economy. A slower-than-expected improvement in the economy is likely to translate into continuin
47、g challenging conditions in the U.S. power markets. National laws regulating greenhouse gas (GHG) emissions are looming, with little impact in 2010 but expected to negatively affect the profitability of power generating projects in the longer term. While the specific form and cost of GHG regulation
48、is unknown, the financial impact is expected to be significant. Power generators with zero and minimal emissions, namely nuclear, hydro, and renewable energy projects, stand to benefit from eventual federal GHG regulation. In the northeastern U.S., thermal power Global Infrastructure the rationale advanced is to economize on project costs. This is the opposite respo
