Japanese mega banks turn to infra debt funds

07 May 2020 - 12:00 am UTC

A Mizuho affiliate that manages Japan’s first project finance debt fund is pushing ahead with its second vehicle and has eyes on a third. With COVID-19 testing asset liquidity and ever tighter bank regulation looming, Asian infra debt funds may be on the cusp of having their day in the sun. Ella Arwyn Jones reports.

As the world continues to weather the onslaught of the COVID-19 health crisis and the economy reverberates in response, a select few investors sit tight in the equanimous shelter offered by infrastructure debt.

Despite debt accounting for around 80% of total transaction value in typically leveraged project financing arrangements, debt funds comprise a very small portion of the total borrowings supporting the sector and even the total capital raised by the infrastructure fundraising universe.

According to Inframation Deals, of the USD 88bn raised by unlisted infrastructure funds last year, only 10% came from debt fund mandates.

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