Bond sales to finance Australian infrastructure projects will increase this year compared to 2009 as banks demand tougher conditions for loans amid a liquidity squeeze, according to Fitch Ratings Ltd.

Lenders are demanding lower debt levels and more restrictive covenants before agreeing to finance projects such as roads, power plants and railways, according to Fitch. Project costs may rise amid labor shortages and as demand for debt financing puts pressure on borrowers, it said.

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Posted by mopeng at March 2, 2010 12:26 AM