This blog has written on numerous occasions in support of financing infrastructure construction with bank loans and then re-financing operation and maintenance of commissioned assets using capital markets.
Construction risks are idiosyncratic, its financing draw down schedule is over the construction period, and the asset will generate cashflow to pay off debts only after construction is completed. Bank loans, which are far more easier to restructure, stagger, and back-load repayments, therefore becomes more appropriate compared to bonds.
In the context of bond market issuances in Asia, this paper points to some interesting insights.
The graphic shows that infrastructure bonds form a very tiny share of the total non-financial corporate bond market.
The default rates of infrastructure bonds come out very favourably compared to non-financial corporate bonds.
On the average coupons and maturities of bond offerings across different regions.