Moody's said that US "project finance bank......>

OIL: Moody's said that US "project finance bank loans for demand risk

infrastructure projects show higher risk of default during initial stages after

financial close." It "has released an examination of the credit performance of a

subset of infrastructure-related projects as an addendum to its annual study of

default and recovery rates for unrated project finance bank loans. The addendum

finds that public private partnerships (PPPs) and other project financings that

are exposed to volume and price risks have a substantially higher default risk

in the first years after financial close than those funded by availability

payments," it said. 

- "PPPs and other infrastructure projects that are exposed to demand risk show a

higher marginal annual default rate than average, especially during the initial

life of the project," says Kathrin Heitmann, a vice president at Moody's and the

lead author of the study. "This suggests that these projects need to establish a

longer operational track record before default risk subsides materially."