Project finance debt issuance peaks in 2008

By Claire Milhench

LONDON (Reuters) - Debt issuance in the global project finance market rose 6.3 percent last year but the level is unlikely to be surpassed anytime soon because of the crisis in credit markets, Thomson Reuters data showed.

Project finance -- expenditure for major financing deals in the energy, transport and social infrastructure sectors -- hit $262.3 billion (£179.7 billion) with Royal Bank of Scotland (RBS.L) and Deutsche Bank (DBKGn.DE) among major players.

"Given the state of the global credit markets and the global economy, it is likely the 2008 figure will not be surpassed for some time and deal flow will slow," Thomson Reuters said.

The data is compiled from banks and financial advisors and checked by Project Financial International and Thomson Financial Securities Data.

Bond volumes totalled just $11.9 billion in 2008, compared with $26.5 billion in 2007, with Deutsche Bank topping the issuance table, up from a second position in 2007 and ahead of Lloyds TSB (LLOY.L) and Canada's BMO Nesbitt Burns (BMO.TO).

Mike Chappell, head of project finance at Lloyds TSB Corporate Markets, attributed the bank's leap into second place to Exeter Blue CLO, a 1 billion euro (£911 million) synthetic securitisation of project finance and infrastructure loans.

The CLO consisted of a mix of public private partnerships and private finance initiative projects, including toll roads and hospitals, which Lloyds TSB had arranged.

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