Page History
References
| Cite summary | ||||
|---|---|---|---|---|
|
Estimating credit risk in unlisted infrastructure debt can be challenging because actual defaults are rarely observed. Due to the significant control rights of lenders in infrastructure project finance in particular (aka step-in rights) action is often taken by lenders before a default of payment takes place.
Looking at raw data, the debt service cover ratio (DSCR) of infrastructure companies seldom goes below 1, which would be the point of 'hard default'. Instead, it typically bounces back whenever it approaches 1, suggesting that low DSCRs do trigger 'credit events' (soft defaults) and restructurings by creditors.
To understand the extent and dynamics of credit risk, therefore, it is necessary to go beyond observing events of defaults under a 'reduced form' approach as is often done (see for example
| BibTeX cite | ||||||
|---|---|---|---|---|---|---|
|
This approach was pioneered by Blanc-Brude et al in a series of papers
| BibTeX cite | ||||||
|---|---|---|---|---|---|---|
|
| BibTeX cite | ||||||
|---|---|---|---|---|---|---|
|
| BibTeX cite | ||||||
|---|---|---|---|---|---|---|
|
Table of contents
| Children Display | ||||
|---|---|---|---|---|
|