项目融资的理论与实践（英文）-636正式版

ProjectFinanceinTheoryandPracticePageleftintentionallyblankProjectFinanceinTheoryandPracticeDesigning,Structuring,andFinancingPrivateandPublicProjectsThirdEditionStefanoGattiAcademicPressisanimprintofElsevier125LondonWall,LondonEC2Y5AS,UnitedKingdom525BStreet,Suite1800,SanDiego,CA92101-4495,UnitedStates50HampshireStreet,5thFloor,Cambridge,MA02139,UnitedStatesTheBoulevard,LangfordLane,Kidlington,OxfordOX51GB,UnitedKingdomCopyright©2018ElsevierInc.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,electronicormechanical,includingphotocopying,recording,oranyinformationstorageandretrievalsystem,withoutpermissioninwritingfromthepublisher.Detailsonhowtoseekper-mission,furtherinformationaboutthePublisher’spermissionspoliciesandourarrangementswithorganizationssuchastheCopyrightClearanceCenterandtheCopyrightLicensingAgency,canbefoundatourwebsite:/permissions.ThisbookandtheindividualcontributionscontainedinitareprotectedundercopyrightbythePublisher(otherthanasmaybenotedherein).NoticesKnowledgeandbestpracticeinthisfieldareconstantlychanging.Asnewresearchandexperi-encebroadenourunderstanding,changesinresearchmethods,professionalpractices,ormedicaltreatmentmaybecomenecessary.Practitionersandresearchersmustalwaysrelyontheirownexperienceandknowledgeinevaluatingandusinganyinformation,methods,compounds,orexperimentsdescribedherein.Inusingsuchinformationormethodstheyshouldbemindfuloftheirownsafetyandthesafetyofothers,includingpartiesforwhomtheyhaveaprofessionalresponsibility.Tothefullestextentofthelaw,neitherthePublishernortheauthors,contributors,oreditors,assumeanyliabilityforanyinjuryand/ordamagetopersonsorpropertyasamatterofproductsliability,negligenceorotherwise,orfromanyuseoroperationofanymethods,products,instructions,orideascontainedinthematerialherein.LibraryofCongressCataloging-in-PublicationDataAcatalogrecordforthisbookisavailablefromtheLibraryofCongressBritishLibraryCataloguing-in-PublicationDataAcataloguerecordforthisbookisavailablefromtheBritishLibraryISBN:978-0-12-811401-8ForinformationonallAcademicPresspublicationsvisitourwebsiteat/books-and-journalsPublisher:CandiceJancoAcquisitionEditor:ScottBentleyEditorialProjectManager:SusanIkedaProductionProjectManager:AnushaSambamoorthyDesigner:MilesHitchenTypesetbyThomsonDigitalContentsPrefacetotheThirdEditionPrefacetotheSecondEditionxiiixviiPrefacetotheFirstEditionxxiForewordbyGiovanniCastellucciForewordbyMarkCrosbieandAlainRauscherForewordbyWilliamL.MegginsonForewordbyDarioScannapiecoAbouttheAuthorandtheContributorsxxvxxviixxixxxxiiixxxv1.IntroductiontotheTheoryandPracticeofProjectFinanceIntroduction112341.1Whatisprojectfinance?1.2Whydosponsorsuseprojectfinance?1.3Whoarethesponsorsofaprojectfinancedeal?1.3.1Industrialsponsorsinprojectfinanceinitiativeslinkedtoacorebusiness451717251.3.2Publicsponsorswithsocialwelfaregoals1.3.3Contractor/sponsorswhodevelop,build,orruntheplant1.3.4Financialinvestors1.4Overviewofthefeaturesofprojectfinance1.4.1Thecontractorandtheturnkeyconstructioncontract(TKCC)261.4.2O&McontractorandtheO&Magreement1.4.3Purchasersandsalesagreements1.4.4Suppliersandrawmaterialsupplyagreements(RMSAs)1.4.5Projectfinanceasariskmanagementtechnique1.5Thetheoryofprojectfinance2727282829291.5.1Separateincorporationandavoidanceofcontaminationrisk1.5.2Conflictsofinterestbetweensponsorsandlendersandwealthexpropriation34361.5.3Projectfinanceintheacademicliterature2.TheMarketforProjectFinance:ApplicationsandSectorsIntroduction4343434749542.1Historicalevolutionofprojectfinanceandmarketsegments2.2Theglobalprojectfinancemarket2.3TheevolutionofthePPPmarket2.3.1TheEuropeanmarketviContents3.ProjectCharacteristics,RiskAnalysis,andRiskManagementIntroduction636365666868823.1Identifyingprojectrisks3.1.1Precompletionphaserisks3.1.2Postcompletionphaserisks3.1.3Risksfoundinboththepre-andpostcompletionphases3.2RiskallocationwithcontractsstipulatedbytheSPV3.2.1Allocationofconstructionrisk:theturnkey(orengineering,procurement,andconstruction—EPC)agreement3.2.2Allocationofsupplyrisk:put-or-payagreements3.2.3Allocationofoperationalrisk:operationsandmaintenance(O&M)agreements838686873.2.4Allocationofmarketrisk3.3Summaryoftheriskmanagementprocess1034.TheRoleofAdvisorsinaProjectFinanceDealIntroduction1051051064.1Theroleoflegaladvisorsinprojectfinancedeals4.1.1Legaladvisor,legaladvisors,andlawfirms:internationalandlocallegalcounsel1074.1.2Projectfinancingdevelopmentstagesandimpactsontheroleoflegaladvisors4.2Roleoftheindependentengineerinprojectfinancedeals4.2.1Initialduediligencereporting1111201214.2.2Monitoringrealizationoftheproject(engineeringandconstruction)4.2.3Assistanceatthetimeofplantacceptance4.2.4Monitoringoperationsmanagement4.3Roleofinsuranceadvisorsandinsurancecompaniesinprojectfinancedeals1241291341351361371384.3.1Rationaleforusinginsuranceinprojectfinancedeals4.3.2Whenshouldinsuranceproductsbeused?4.3.3Areaswheretheinsuranceadvisorisinvolved4.3.4Typesofunconventionalandapplicableinsuranceproductsavailableforcrossborderprojectfinancedeals4.3.5Combinedinsurancesolutions—structureandcontent4.3.6Classificationofinsuranceunderwriters4.3.7Theevolvingroleofriskadvisoryintheacquisitionofprojectfinanceassets1401451461485.ValuingtheProjectandProjectCashFlowAnalysisIntroduction1511515.1Analysisofoperatingcashflowsandtheirbehaviorindifferentprojectlife-cyclephases1531565.1.1InputsforcalculatingcashflowsContentsvii5.2Definingtheoptimalcapitalstructureforthedeal1711761781801815.2.1Equity5.2.2Seniordebt5.2.3VATfacility5.2.4Stand-byfacility5.2.5Identifyingsustainabledebt/equitymixesforsponsorsandlenders5.3Coverratios1821911935.3.1Whatcoverratioscantellusandwhattheycan’t5.3.2Coverratiosasanapplicationofthecertaintyequivalentsmethod1992012035.4Sensitivityanalysisandscenarioanalysis5.4.1Whichvariablesshouldbetestedinsensitivityanalysis?6.FinancingtheDeal209210210213214217220Introduction6.1Advisoryandarrangingactivitiesforprojectfinancefunding6.1.1AdvisoryServices6.1.2ArrangingServices6.1.3Integrationofadvisoryandarrangingservices6.2Otherrolesinsyndicatedloans6.2.1Singlestagesyndication,two-stagesyndication,andclubdeals2216.2.2Newformsofcooperationbetweenbanksandinstitutionalinvestors6.3Feestructure2242312312322332342372382476.3.1Feesforadvisoryservices6.3.2Feesforarrangingservices6.3.3Feestoparticipantsandtheagentbank6.3.4Exampleoffeecalculation6.4Internationalfinancialinstitutionsandmultilateralbanks6.4.1MultilateralOrganizations6.4.2Regionaldevelopmentbanks6.5Bilateralagencies:developmentalagenciesandexportcreditagencies(ECAs)2552552562612646.5.1Developmentalagencies6.5.2ExportCreditAgencies(ECAs)6.6Otherfinancialintermediariesinvolvedinprojectfinance6.7Fundingoptions:equity6.7.1Timingoftheequitycontribution,stand-byequity,andequityacceleration6.7.2CansharesinanSPVbelistedonastockexchange?6.8Fundingoptions:mezzaninefinancingandsubordinateddebt6.9Fundingoptions:seniordebt2652662672762766.9.1ThebasefacilityviiiContents6.9.2Workingcapitalfacility6.9.3Stand-byfacility6.9.4VATfacility6.9.5Loanremuneration6.9.6Loancurrency6.9.7Repaymentoptions6.9.8RefinancingloansalreadygrantedtotheSPV2762772772772782782852892912932942993013053063123203223223276.10Projectleasing6.10.1Valuingtheconvenienceofprojectleasing6.10.2TheTaxEffect6.11Projectbonds6.11.1Investorsinprojectbonds6.11.2Variouscategoriesofprojectbonds6.11.3Municipalbonds6.11.4Whenshouldprojectbondsbeused?6.11.5Procedureforissuingprojectbonds6.12Islamicfinanceforinfrastructurefinancing6.12.1KeyprinciplesofIslamicfinance6.12.2KeycontractsofIslamicfinance6.12.3Sukuk7.LegalAspectsofProjectFinanceIntroduction3373373387.1Theprojectcompany7.1.1Reasonsforincorporatingtheprojectinaprojectcompany3397.1.2Projectcompanyasajointventure:anotherreasontodevelopaprojectinanSPV3413413427.1.3Projectcompanyandgroupsofcompanies7.1.4Corporatedocumentation:articlesofincorporation7.1.5Outsourcingthecorporatefunctionsoftheprojectcompany:howthecompany/projectactuallyruns3433447.2Contractstructure7.2.1Beforethefinancing:theduediligencereportandthetermsheet7.2.2Classificationoflegaldocumentsrelatedtotheproject7.2.3Creditagreement7.2.4Securitydocuments:securityinterestsandwhattheydo7.2.5Otherfinancedocuments7.2.6Projectagreements3443483493763863904017.3Refinancingprojectfinancedeals8.CreditRiskinProjectFinanceTransactionsIntroduction4054068.1TheBaselCommittee’spositiononstructuredfinancetransactions(specializedlending,SL)410Contentsix8.1.1Classesoftransactionsincludedinspecializedlending4118.2Ratingcriteriaforspecializedlendingandtheirapplicationtoprojectfinance4124144144144144158.2.1Financialstrength8.2.2Politicalandlegalenvironment8.2.3Transactioncharacteristics8.2.4Strengthofsponsors8.2.5Mitigantsandsecuritypackage8.2.6Summaryofgradingcriteria.Assigningtheratingtoaprojectfinanceexposure4158.3TheBaselAccordandthetreatmentofcreditriskforPFloans:isPFmoreriskythancorporateloans?8.4EmpiricalstudiesonPFdefaultsandrecoveryrates8.4.1Moody’sstudyondefaultandrecoveryrates(1983–2014)8.4.2StandardandPoor’sreportsonPFhistoricalperformance8.5Introductiontotheconceptsofexpectedloss,unexpectedloss,andvalueatrisk4184274284314344364384384394444474494504508.6Definingdefaultforprojectfinancedeals8.7Modelingtheprojectcashflows8.7.1Definingariskassessmentmodel8.7.2Identifyingprojectvariablesandkeydrivers8.7.3Inputvariables:estimationanddatacollection8.7.4Estimatingprojectcashflowandvaluingresults8.8Estimatingvalueatriskthroughsimulations8.9Definingprojectvalueintheeventofdefault8.9.1DeterministicversusstochasticLGDestimates8.9.2LGDdrivers:thevalueofunderlyingassetsversusdefaultedprojectcashflows4524528.9.3RestructuringversusdefaultCaseStudy1:Cogeneration1455455455457457457458459459459459460460460C1.1ThesituationC1.2TheproductionprocessC1.3ThesponsorsoftheoperationC1.4TheagreementsatthebaseoftheoperationC1.4.1Cogeneration1constructionagreementC1.4.2DeasfaltingplantconstructionagreementC1.4.3OperationandmaintenanceagreementC1.4.4Energysale/powerpurchaseagreementC1.4.5SteampurchaseagreementC1.4.6FeedstocksupplyagreementC1.4.7OxygensupplyagreementC1.5ThefinancialstructureC1.6Final:intheofficeofArrigonixContentsCaseStudy2:ItalyWaterSystemIntroduction461461461462462462462462463463463464464464465465469470C2.1BusinessplanoftheprojectC2.2AssumptionsC2.2.1TimingC2.2.2InflationindexC2.2.3DepreciationC2.2.4InterestandfinancialcostsC2.2.5InterestonpositivecashbalancesC2.2.6Value-addedtax(VAT)C2.2.7TaxesC2.2.8WorkingcapitalC2.2.9DebtservicereserveaccountC2.3CapitalexpenditureC2.4FinancialrequirementandsourcesoffinancingC2.4.1FinancialsourcesC2.5OperationalperiodC2.5.1OperationoftheexistingwatersystemC2.5.2OperationoftheNewWaterSupplyandTreatmentSystems470471471C2.5.3OperationofthetwohydroelectricplantsC2.6EconomicandfinancialratiosCaseStudy3:OdebrechtDrillingNorbeVIII/IX:ProjectBondsasaRefinancingToolinProjectFinanceC3.1Backgroundofthedeal475475479C3.2CompaniesinvolvedC3.2.1OdebrechtDrillingNorbeVIIILLCandOdebrechtDrillingNorbeIXLLC479479479479480480481481481482482484486486486487487C3.2.2OdebrechtDrillingNorbeVIII/IXLtdC3.2.3OdebrechtOilServicesLtd.(OOSL)C3.2.4OdebrechtOleoeGas(OOG)C3.2.5PetroleoBrasileiroS.A.(Petrobras)C3.2.6DaewooShipbuildingandMarineEngineering(DSME)C3.3ProjectStructureC3.4ContractualStructureC3.4.1DrillshipConstructionContractsC3.4.2KEXIMrefundguaranteesC3.4.3CharteragreementsC3.4.4ServiceagreementsC3.4.5TechnicalserviceagreementC3.4.6SpecializedoilindustryserviceagreementC3.4.7AccountagreementsC3.4.8EquitysupportagreementsC3.4.9InsurancepoliciesContentsxiC3.5NotesC3.5.1Description487487489489493493494C3.5.2RedemptionandrepurchaseC3.5.3CashflowdynamicsandprojectaccountsC3.5.4Step-inrightC3.5.5DefaultandconsequencesC3.6FinancialstructureCaseStudy4:WatercraftCapitalS.A.:RefinancingProjectFinanceTransactions497497498498500502502504509509512512C4.1IntroductionC4.22020ProjectBondInitiativeC4.2.1BackgroundC4.2.2ProjectBondCreditEnhancement(PBCE)C4.3ProjectandtheSpanishgasmarketC4.3.1ProjectCastorC4.3.2SpanishgasmarketC4.4ProjectbondissuanceC4.4.1WatercraftCapitalS.AC4.4.2CashwaterfallC4.5RiskfactorsandinvestmentevaluationCaseStudy5:ViveracquaHydrobond:WhenInfrastructureInvestmentsMeetSecuritizationC5.1Introduction515515516518518520521521523523523524527527527528528528528530530531C5.2ViveracquaHydrobond1C5.2.1Phase1—minibondsC5.2.2phase2—ABSC5.2.3PricingC5.2.4CreditenhancementC5.2.5CashwaterfallC5.3ThepartiesC5.3.1FinanziariaInternazionaleSecuritizationGroupS.p.AC5.3.2ViveracquaconsortiumC5.3.3EuropeanInvestmentBankC5.3.4VenetoSviluppoS.p.AC5.3.5SecuritizationServicesS.p.AC5.3.6BNPParibasSecuritiesServicesC5.3.7FinintInvestmentsSGRS.p.AC5.3.8SINLOC—SistemaIniziativeLocaliC5.4TheIntegratedwatersystemmarketC5.4.1LegalframeworkC5.4.2FunctionalsectorsC5.4.3TariffregimeC5.5TheItalianmarketforminibondsxiiContentsC5.5.1Minibonds:abrandnewmarketC5.5.2ThemarketenvironmentC5.6Riskfactorsandinvestmentevaluation531532534CaseStudy6:QuezonPowerLtdCo.ProjectFinance.TheImpactofRiskManagementontheCostofFundingC6.1Project537537C6.1.1Projectsponsors,ownershipstructure,andbasictermsoffinancingC6.1.2ThecontractualstructureofQuezonPowerProjectC6.2TheProblem538540544Appendix:TheStructureandFunctioningoftheSimulationModelIntroduction545545545546548549549549550551551551553554554554556556557557560560561A1BreakdownofthefinancialmodelA1.1AssumptionsA1.2CapexanalysisA1.3SensitivitiesA1.4CapexA1.5Life-cyclecostsA1.6VATA1.7DepreciationA1.8PublicgrantA1.9EnergyrevenuesA1.10WaterrevenuesA1.11OpexA1.12Profitandloss,cashflowstatement,andbalancesheetA1.13IRES(Italiancorporateincometax)andtaxA1.14WorkingcapitalA1.15GuaranteefacilityA1.16FinancialdebtA1.17EquitysheetA1.18CashflowstatementA1.19IRR(internalreturnrate)A1.20SummaryGlossaryandAbbreviationsReferences563577Index587PrefacetotheThirdEditionThisbookhasarrivedatthethirdedition,fromthefirstonewhichdatesbacktotheendof2007.Almost10yearshavepassedandthelandscapeofinfrastructureinvestingandfinancinghassignificantlychanged.Thesecondeditionwaspublishedaftertwodeepfinancialcrises,firstin2008withtheLehmanBrotherscollapseandthentheEurozonesovereigndebtturmoilof2011–12.Sincethen,theprojectfinancemarkethasshownaremarkablerebound,handinhandwiththeglobalsyndicatedloanmarket.Afterbottomingoutat$1.5tril-lionin2009,syndicatedlendingreachedanewrecordlevelofabout$4.7trillionattheendof2015,higherthanthepre-Lehmanperiod.Likewise,projectfinanceloansgrewfromtheirlowestlevelof$138billionatyear’send2009tobreakanotherrecordat$277billionatthecloseof2015.Onceagain,thenewrecordsurpassedprecrisislevels.Despiteregulatoryinterventionsonbankcapital(BaselIIIhasneverbeenpar-ticularlygenerouswithcapitalabsorptionsforinfrastructurefinancing)andsluggishmacroeconomicgrowthinadvancedeconomies,dataclearlyindicatethatthissegmentoffinancehasbeenparticularlyresilienteveninveryadverseeconomicscenarios.Thisfactdoesnotsurprisememuch.Theinfrastructuregapishugeinmanymac-roregionsoftheworld,andgovernmentsarefeelingasqueezeonfinancialresourcesforpublicworks.EstimatesfromtheOECDquantifytheinfrastructuregapat$71trillionuntil2030whichbreaksdownto$2trillionuntil2020intheEuropeanUnionalone,anamountclosetotheprojectionsbytheAmericanSocietyofCivilEngineersfortheUnitedStates.Innormalcircumstances,thisgapwouldbeaseriousdragonglobalmacroeco-nomicperformance.However,wearenotlivinginnormaltimes.SincetheLehmandefault,intenseQE-QuantitativeEasinginterventionsbycentralbankshavepushedinterestratestorockbottomlevels,floodingfinancialmarketswithabundantliquidityandforcingtraditionalfixedincomeinvestorstolookfordecentyieldsinalternativeassetclasses.Asaconsequence,infrastructurehasprogressivelybecomeaninterest-ingoption,attractingbiggerflowsoffundsfromlongterminvestors.Thisisatrendthathasgainedmomentuminthelast5years,andyetwasalmostinexistentwhenthefirsteditionofthebookwaslaunchedinthemid-2000s.Theemergenceofanewcategoryofinvestorsininfrastructurehasimpactfulim-plicationsforthebusinessofprojectfinancing.First,sponsorsarenownolongerrep-resentedbyindustrialcompaniesorprojectdevelopersalone,butalsobyanewgroupofpurefinancialinvestors.Risk/returnprofilesandincentivemechanismsforthetwocategoriesarepolesapartandhaveverydifferentimplicationsforseniorlenders.Sec-ond,traditionalsyndicationstrategiesarebeingadaptedtoaccommodatetheneedsnotonlyofbanksbutalsoofinstitutionalinvestorsattractedbytheprivatedebtsegmentofcapitalmarkets.Third,andthisissomethingofaconcernforbankregulatorsduexivProjectFinanceinTheoryandPracticetotheexpansionof“shadowbanking,”institutionalinvestorsarebecomingsubstitutesfortraditionalbanklendingwiththeiractivityindirectlendingortheirinvestmentsinprivatedebtfundvehicles.WhileregulatorshaveplayedanimportantdiscipliningroleinthebankingsystemaftertheLehmancrisis,unfortunatelyshadowbankingisstilleludingstrictregulation.What’smore,anabnormalproliferationofactivityinthissegmentoffinancialmarketscouldgenerateundesiredeffectsintermsofstabilityinthemediumterm.Thethirdeditionofthisbookdrawsontheprevioustwointermsofstructureandsequenceoftopics,butpresentsnoteworthychangesaswell.Whilethekeyprinciplesofa“sound”projectfinancedealhavenotchanged,themarketandinvestorshavemodifiedthewayaprojectfinancetransactionisoriginated,analyzed,andfinanced.Letmesummarizethemostsalientinnovationsofthisedition.(Withoutattempt-ingtobeexhaustive,Iwillleavetothereaderthepleasureofdiscoveringtheminorchangesdisseminatedthroughouttheeightchaptersofthebook.)Firstofall,thecasestudysectionisexpandedtoincludethreenewcases.Thefirstone,OdebrecthNorbeVIII/IX,isusefultoanalyzethecontractualstructureofcom-plexultradeepwaterdrillingvesselsthataredesigned,builtandfinancedwithbondissuesinadevelopingeconomy,inthiscaseBrazil.Thesecond,WatercraftCapital,studiestherefinancingofagasstorageprojectinSpainwithabondissuebackedbyastateguaranteesetupbytheEuropeanUnionandtheEuropeanInvestmentBank.Thethird,ViveracquaHydrobond,showsaninterestingasset-backedsecuritizationtransactionwithanunderlyingportfolioofprojectfinancedwaterandseweragein-vestments.Takentogether,thesecasesmarkaclearbreakthroughcomparedwiththepreviouseditionsbecausetheyhelpreadersunderstandtheprogressiveconvergencebetweenthetraditionalbankloanmarketanddebtcapitalmarketsforbondsorassetbackedsecurities.Thesecondinnovationofthebookistheanalysisofinstitutionalinvestorsininfra-structure,andtheinclusionofinfrastructureinmoretraditionalfinancialportfolios.Moreover,thebookincludesaninvestigationofsyndicationstrategiesinvolvinginsti-tutionalinvestorsandthenewpartnershipmodelsthatputtogetherbankandnonbanklenderstoprovidefundsforinfrastructureprojects.Thethirdinnovationisrepresentedbyacloserlookatpublic-privatepartnerships(the3Pmodel)andthepossiblewaysgovernmentscansupportandincentivizetheprivatesectortoprovidemoneyforinfrastructure.Clearly,moreactiveparticipationbythepublicsectorinprivatelyfinancedinitiativesexposestheprivatesectortoin-creasedrenegotiationandregulatoryrisk.Furthertothistopic,amoredetaileddiscus-sionofpoliticalandcountryriskisincludedinthededicatedsectionsofChapter3.ThelastinnovationpertainstoIslamicfinance.PerhapsnotmanyknowthattheIslamicEconomywasworth$1.9trillionin2015,withapotentialdevelopmentupto$3.0trillionby2020.TheglobalMuslimpopulationisexpectedtogrowfrom1.7bil-lionin2014to2.2billionby2030,ariseof26.4%.The57mostlyMuslim-majoritymembercountriesoftheOrganizationofIslamicConference(OIC)hadaGDPwhichrepresented15%ofthetotalglobalGDP(PPPbased)of$113trillionin2015,fertileterrainforfutureprojectandinfrastructurefinanceinitiatives.However,thefinancingofinfrastructureincountriesadheringtotheMuslimreligionisincompatiblewiththePrefacetotheThirdEditionxvtypicalprojectfinancepackageusedinadvancedWesterneconomies.Inlightofthis,Chapter6presentsacompleteoverviewofSharia-compliantcontractsthatcanbeusedtoconveymoneytoinfrastructureprojects.TheambitionofProjectFinanceinTheoryandPracticeis,andalwayshasbeen,toserveasthetextbookreferenceforscholars,professionals,andstudentswhowanttogetafullpictureoftheuseandapplicationsoftheprojectfinancetechnique.Itrulyhopethisthirdeditionwillmeetalltheexpectationsofacuriousanddemandingreader.Ittookmemorethan2yearstorevisethesecondeditionandproducethisnewone,andnowthatitiscomplete,Iwanttothankallthecontributorswhomadethispossible:AlessandroSteffanoniandDanieleCorbino(fortheItalyWaterCaseandthereleaseoftheaccompanyingexcelfinancialmodel),MassimoNovo(forChap-ter7),SarahDeRoccoandFedericoCottone(fortheinsurancesectionofChapter4),GiovanniViganò(fortheOdebrechtcase),GianlucaMassimiandAlbertoNobili(fortheViveracquaHydrobondCase),AndreaFlorio(fortheViveracquaHydrobondandWatercraftcases),VeronicaBonetti(fortheQuezonPowercase).IalsowishtothankScottBentleyandSusanIkedaatElsevierfortheirconstantsupportandexcellentcooperationinpreparingtheneweditionofthevolume,andJillConnellyforeditingrevisionsoftheentirebook.WhilethankingJill,IwantalsotorememberPeterHunt.Peterdidanexcellentjobyearsagotranslatingthefirsteditionofthebookandmygratitudecontinues,eventhoughhepassedaway3yearsago.Letmealsothankmycolleagueswhohavekeptintouchwithmeinthepastfewyearsandindifferentoccasionstodiscussmyresearchworkonprojectfinance:AlessioCaruso,FedericoMonteporzi,RobertoSelvetti,AndreaVenturelli,AndreaSironi,FrancescoSaita,StefanoCaselli,VeronicaVecchi,FrancescaCasalini,PaoloColla,EmanueleBorgonovo,AndreaResti.SpecialthanksgotoBillMegginson,GiovanniCastellucci,DarioScannapieco,MarkCrosbieandAlainRauscherwhokindlyac-ceptedmyinvitationtowritetheforewordstothenewedition.LetmeconcludewithadedicationtomyfatherLino.HepassedawaywhileIwaspreparingthisthirdeditioninaverytoughperiodofmylife.Althoughalwaysasevereandsilentobserver,Iamsurehewouldhavebeenpleasedtoknowthatthisbookfinallysawthelightofday.StefanoGattiMilan,April2018PageleftintentionallyblankPrefacetotheSecondEditionThefirsteditionofthisbookwaspublishedattheendof2007,withitsprefacedatingbacktoJune2007.Atthattime,financialmarketsworldwidewereattheirpeaksinmostofthesegmentsoffinancialintermediation.ThegrowthwassustainedbyaverylongperiodofexpansivemonetarypolicybytheFederalReserve,withverylowlevelsofrealinterestrates,growthofequityindicesandprices,expansionintherealestateandcreditmarkets,andanincreaseduseofanewgenerationofincreasinglycom-plexasset-backedsecuritiesandstructureddebtproducts.InEurope,manycolumnistswerecriticizingthemoreconservativepolicyoftheECBanditsexcessiveattentionforinflationarypressuresratherthanforeconomicgrowth.Inthisfavorableenvironment,thesyndicatedloanmarketandprojectfinancereachedtheirunsurpassedpeaksin2007.Thesyndicatedloanmarketregisteredaround4.5trillionUSdollarsofwhicharound5%representedbyprojectfinance.Weallknowwhathappenedafter2007.WiththebankruptcyofLehmanBrothers,thewholeeconomicsystemstartedaperiodofprolongedrecessionandofoverallweakmacroeconomicperformancecomparedtothepreviousdecade.ThemassiveinterventionsputinplacebytheCentralBanksandinparticulartheextraordinaryquantitativeeasingactionsbytheFederalReservetriedtorestorethenormalizedmarketconditions.After2009,theUSstartedtoshowsignsofrecov-ery.However,thefinancialcrisis