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Securitisation is not dead

Securitisation is not dead

By Michael Heise, chief economist Allianz Group/Dresdner Bank

Special focus: Sub-prime and leveraged loans

Special focus: Sub-prime and leveraged loans

Follow the buildup to today's subprime and leveraged loan problems.

May 2003

Project finance faces up to change


The aftermath of war in Iraq may delay a few project finance deals in the Middle East but the market is in good health. Development diversification will spur large projects. Sponsors, however, may have to accept more costly financing.




DRAMATIC CHANGES IN the way project finance deals in the Middle East are structured are being predicted by leading banks involved in advising the sponsors and arranging the loans.

They forecast that an era in which the banks have fought to offer ever cheaper money for periods of up to 20 years will come to an end later this year as sponsors accept more realistic terms. The market will also be tested as some of the big natural gas projects seek to raise $2 billion-plus in non-recourse finance.

Other trends include a more significant role for regional banks, such as Arab Banking Corporation (ABC), National Bank of Abu Dhabi and Gulf International Bank (GIB), which have built up expertise in an attempt to win more advisory and lead-manager business. Bankers also expect a sharp increase in the involvement of export credit agencies, whose participation in the past five years has been limited. More Islamic banks are...


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