Prof' Glenn Yago

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• Prof. Glenn Yago
• Milken Institute
• October 2009

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Infrastructure Asset Universe
UtilityTransmission
Social Infrastructure Assets (PPP / PFI)
Transportation(user pays)
CompetitiveAssets

• Natural monopolies or dominant providers of
  essential services and therefore regulated in the
  level of revenue earned or charges imposed
• Electricity
• Gas transport
• Water and sewerage Networks
• Water treatment facilities

• Infrastructure assets required by governments to
  provide essential social services
• Education
• Healthcare
• Defence
• Prisons
• Government accommodation

• Operate in a competitive product or service
  market
• Power generation
• Communication Infrastructure (e.g., towers)

• Depend on volume of patronage as their main
  revenue source
• Railways
• Airports
• Air traffic control
• Toll roads
• Ports

• Long duration investment opportunity
• Tolerance for high leverage
• Generate recurring equity cash flows
• Can base business model on periodic refinancings

• Key Investment Characteristics
• Predictable, long-term cash flows
• Natural hedge to inflation
• Ability to contract / hedge returns
• Barriers to entry / competitors
• Low correlation to equity markets

3
???? ???? ???"? ??????????
4
????? ?????????? ????? ?????2004-2006
5
?????? ???????????? ????? ????? ??? ????? 2006
Q1
6
?????? ???????????? ????? ??????????????? ??????
????????2004-2006
7
Revenue Bonds

• ????? ???????? ?? ????? ???????? ?? ??????
• ??????
• ????? ???? (???? ??????)
• ?????? (?????? ??????, ?????? ??????, ????? ????,
  ?????, ???? ?????)
• ?????? (???, ?????, ????, ?? ????, ????? ?????)

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State Revolving Funds (SRF)

• ????? ?????? ???????? ???????? ????? ?????
  ??????? ??????? ????????? ?? ?? ??????? ?????
• ??????? ???, ???-???, ????? ?????
• ????? ??? ?-state ??????? ?? ?????? ????????
• ???'??? ?? ?- State

9
????? ??? ?????????? Fund Exploration

• ????? ?? ??US State Level Water Revolving Funds
• ????? ??????? ?? ????? ?????
• ?????
• ???? ???? (50 ?????? ???? ?????? ????????? ? 15
  ???)
• ??????? ??USAID
• ???? ????

10
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• ????? ??? ???? ????, ????? ???, ??????? ?????
  ???? ????? ?????? ??????
• ????? ?????
• ???? ?????? ????? ??????
• ???? ?? ???? ?????? ????? (?????, ?????? ???????)
• ????? ?????? ????? ??????? ??????

11
????? ?????

• ??????? ?? ??? ????? ????? ?????? AAA ?????
  ?????? ????? ?????? ????? ?????? ????? ????
  ??????? ?????????
• ????? ???????
• 75 ??????? BBB ? A ????"? ?????? ?? ??? ?????
  ??????

12
????? ????? ??????????(MDFs)

• ??????? ????? ????? ?????? ??????
• ????? ?????? ????? ??? ????? ???? ????? ????,
  ????? ?? ??????? ???????? ???????
• Local de France ? Western Europe ?????? ???????
  ?????? ?????? ???
• ?'??? ?????? ??????? ???????

13
??????? ? MDF

• FINDETER (Columbia)
• Rediscount facility for commercial bank ???????
  ?????? ???????????
• TNUDF (Tamil Nadu Urban Development Project)
• ????? ????? ?????? ???????
• ???? ????? ????? ?????? ?? ?????? ????? ???????

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Development Credit Authority

• 50 ???????
• ?? ??? (??????, ??"?, ?????)
• ?? ???????? ????????
• ???? ?????
• Greater Johannesburg Municipal Council, South
  Africa
• Pooled Finance, India
• LGU Guarantee Corporation, Phlippines

15
????? ???????? ????????? ?????

• ?????? ??????? ?? ??? ??????? ????? ???? ???? ??
  20
• 240 BOT ????? ????, ? 300 ????? ??????. ?????
  ???????? ?????/??????? ???? ? 25-30 ???, ???? ???
  ???? ??????
• ??? ???? ? 90 ???? ??????? ?? 569 PPP (????????
  ?????-???? ????) ?????? ???? ??????? ??????
  ?????????

16
??????? ?????? ?????????? ?"????? ????, ??????
???????"

• ????? ???? ????? ???????
• ????? ????? ???? ???????
• ?????????
• ????? ??????? ????? ???? ?????? ??????, ?????
  ???????

17
??????? ?- BOT/PPP

• ???? ???? ?? ????
• ???? ??????" ?? ????
• World Bank, BTC Pipeline
• ???? ?????? ?? ???????
• BOT Road/Rail in Thailand
• Enron PPP power plant in India,
• Philippine Airport
• ????? ?????? ???????
• ???? ??? ?? ????? ????????
• ?????? ???? ??????
• ????? ?????

18
????? ????? ????? PPP

• ?????? ??????
• ??????? ??????? ?????? ??????
• ?????? ??????
• ?????? ?? ???? ????????/??????????
• ??????? ?? ????? ??????
• ????? ??????
• ?????? ?????? ???? ????????? ??????? ?? ?????????
  ?? ??? ??????
• ?? ???????? ??? ???? ???? ????

Source Flanagan and Seltzer, A Roundtable
Discussion of Californias Experience with
Innovations in Public Finance Findings,
Recommendations and Proceedings. USC. December
2000
19
????? ????? PPP)????)

• ???? ??????? ??? ?????
• ?????? ????? ?? ?????? ???????? that can be
  monetized
• ?????? ?????? ?????? ?????? ?????? ?? ????
  ??????? ?????
• ????? ????? ????????
• ????? ?????? ????? ?? ?????? ???? ?????
• ????? ???????? ????? ?? ????? ?????? (?????)

Source Flanagan and Seltzer, 2000
20
???? ??????? ?????? ????? ??????????

• 475 ?????? ???? ???????? ???????, revolving fund,
  ????????? ????? ????????? ?? ?????? ????????
  ????? ?????

21
?????? ??? ?????? ???? ?????
Increasingly Public
Increasingly Private
Source Flanagan and Seltzer, 2000
22
??????? ????? ???????

• ????? ?????? ????? ???????? ???????
• ?????? ????? ??????
• ????? ????? ?????? (?????? ?????? ???????,
  ??????? ????????)
• ?????? ????? ???? ??????
• ????? ????? ?????? ?? ?????? ???????? ?? ???
  ????? ????? ???????? ?? ???? ??????

23
???????? ???????? ?? ??????? ????????
Source Flanagan and Seltzer, 2000
24
????? ?? ?????? ????? ?????? Grant Anticipation
Revenue Vehicles (GARVEEs) Bonds

• ?????? ?? ?????? ?? ????? ?????? ??? ???? ???? ??
  ???? ??????? (80) ?? ???????? ?????? ??????
  ??????
• ????? ?????? ????? ?????? ?? ??? ??????, ???????
  ?? ????? ?????? ?? ??? ??????
• State must meet match on present-value basis

25
????? ?? ?????? ????? ?????? Grant Anticipation
Revenue Vehicles (GARVEEs) Bonds
Source Flanagan and Seltzer, 2000
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????? ?? ?????? ????? ?????? Activity Bonds
Source Flanagan and Seltzer, 2000
27
????? ?? ?????? ????? ?????? Tax-Credit Bonds
Source Flanagan and Seltzer, 2000
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501(c)(3) Bond Market

• ????? ????"??? ?????? ?????? ?????? ??? 501(c)(3)
• ?????? ?????? ?
• ????? ?????? ?? ???? ?????? ??????? (Section 8
  and 236)
• ????? ???? ?????? ???? ????
• ???? ????? ???? ?? ????
• ???? (????? ???? ?? ??????? ????)
• ?????? ???????
• ??? ????? ?-Healthcare

29
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• ??????? ?????????? ???? ??????, ???? ????? ???'
• ?????? ?? ????? ???? ?? ????? ????? ???
• ?????? ?????- ????? ?????? ???? (??????? ??????,
  ????????) ?????? ?????? ?????? ?? ????? ????