Infrastructure Partner Barney Allison Comments On PABs For IJ Global
Barney Allison was featured in the IJ Global story, PABs: Favoured Financing. The story provides an overview of how private activity bonds (PABs) have been a consistent source of funding for P3 projects in the US over the last decade, and benchmarks PABs against other funding options in the P3 marketplace—such as private placement bonds.
For the story, Mr. Allison commented on how private placement bond financings compare with PABs. Private placements may be competitive with PABs since you can get fixed spreads over long-term US treasuries, which are still historically low right now. There seems to be an appetite among investors for long dated fixed rate private placement deals where you can negotiate a draw down feature during construction vs having to capitalize interest in a PABs deal. Concerning market conditions, Mr. Allison stated that he is seeing more interest in the market in trying to come up with tax-exempt governmental bond solutions for P3 transactions vs private placement, particularly for projects that aren’t eligible for PABs.
To read the full article in IJ Global, click here (subscription required).