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Filling the lending void: The infrastructure debt fund market continues to grow
- June 1, 2018: Vol. 11, Number 6

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Filling the lending void: The infrastructure debt fund market continues to grow

by Jody Barhanovich

Before the global financial crisis, which is known to be the worst financial crisis since the Great Depression in the 1930s, shocked the United States in 2007 and 2008, traditional banks were responsible for most of infrastructure debt financing.

After the crisis, however, new regulations limited the ability of banks to provide loans, paving the way for infrastructure debt funds to step in and fill the finance void left by banks whose lending was curtailed by new regulations and a depressed global economy.

“Since the GFC, banks have been less able to hold debt that is ‘un-rated,’ below investment grade or defined as ‘project lending,’” says Jan Mende, senior vice president in the real assets consulting group at Callan. “Ten years ago there were 25 banks that offered project finance, and today there are less than 10 banks in that space.”

This is a result of Basel II and Dodd-Frank regulations, new rules given to banks, which require them to hold s

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