Research - JULY 21, 2016

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Infrastructure debt gets high marks second year running

by Drew Campbell

Infrastructure debt ranks better than many nonfinancial corporate debt offerings, according to Moody’s fourth annual report on the historical credit performance of all rated infrastructure debt (1983–2015).

The report updates Moody's previous study on infrastructure default and recovery rates published in March 2015; its key findings with the expanded data set are generally consistent with the previous study, confirming infrastructure debt’s comparatively solid performance.

"In the aggregate, infrastructure debts are less likely to incur credit losses than NFC issuers, especially over longer horizons. On average, a total infrastructure debt security loses 0.3 percent of its face value over a five-year horizon and 0.4 percent of its face value over a 10-year horizon, compared to 6.0 percent and 8.9 percent, respectively, for a typical NFC issuer,” says Varun Agarwal, a Moody's assistant vice president and the lead author of

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