A landmark study conducted in 2003 by four leading project finance banks - Deutsche Bank, ABN Amro, Societe Generale and Citigroup - has concluded that complex structured financial deals for multi-billion dollar projects around the world are no more risky than conventional lending to the corporate sector. The study finds that:

The "loss given default" in the combined project loan portfolios of the four banks is around 25%. The majority of the defaulted project finance loans resulted in a restructuring with 100% of loan value retained. Each of the four banks had an individual average recovery rate significantly over 50%. This was at, or above all other classes in the S & P loss/recovery database (including leveraged loans, unsecured bank loans and bonds).

Posted by rjorr at April 28, 2006 9:26 PM