Why invest in infrastructure debt
Santander Asset Management (‘SAM’) Global & Local Infrastructure Debt Strategies provide an opportunity to participate in the infrastructure private debt market in continental Europe, UK and the ‘Americas’ by investing in senior and junior limited-recourse private debt, financing the construction and operation of infrastructure projects and utilities assets. The SAM offering will be based on origination agreement with Santander Corporate and Investment Banking (‘Santander’) giving its clients access to the pipeline of one of the leading global players in infrastructure debt financing.
Attractive yields • Infrastructure senior debt consistently yields more than [100/150] basis points (bps) above similarly rated investment grade (IG) corporate bonds. This extra yield premium is further enhanced to around [500/600+] bps for non-investment grade junior infrastructure debt compared to non-IG corporates index. • The infrastructure debt portfolio will be primarily senior secured/IG with a mix of floating rates loans (with a fixed credit spread) and fixed-rate private debt. Low default/ high recovery rates vs like-rated corporate debt • Infrastructure debt has low historic default rates that typically decrease significantly during the life of the infrastructure project – this compares very favourably to similarly rated corporate bonds. • According to Moody’s/ S&P, the ultimate recovery rates for project finance bank loans average 86% globally.