Buyside Infrastructure Investors: Where are you finding value?
It's a challenging deal environment out there for infrastructure investors. Particularly for credit investors, as borrowers can tap into so many sources of cheap credit:
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For public companies, since bond markets are rocking there is no interest in a non-recourse financing with an asset manager.
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Private borrowers: if you can tap into the bank debt market, credit is being given away by banks without any prepayment penalties, and the Term Loan B, US Private placement, and 144a market are all on fire.
Relative value is very hard to come by. Anyone else out there dealing with this?
Credit sources may be cheap, but covenants would accordingly be commensurate with risk/return. A deal is priced cheaply ultimately due to structural and contractual risk mitigation.
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