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INFRASTRUCTURE FINANCING |17 e the back owlback ewis, ncial o do vernarted elves Not ys of ublic and they had ately vernd so ikely need than debt ging tricound s no shortage of projects or lenders. "There is a very robust market for financing these projects," says Linda Bertoldi, chair of the National Electricity Markets Group at Borden Ladner Gervais LLP. Bertoldi, who works mainly on electricity deals, says financing in that sector is extremely active, especially renewable energy projects in the $100-million to $700million range, helped along by government green-energy commitments. She believes infrastructure projects are a fixture on the financing scene. "They provide long-term stable cash flow in a time of uncertainty," with returns of 4 to 5 per cent or even higher. "People look at infrastructure and think: 'We need it. It's not going anywhere.'" Demand can be seen in the race to be part of certain infrastructure lending deals, says Pennycook of Davies. "Is there competition? Absolutely," she says. "In the bond markets, there have been several projects where the underwriters went out to the market and they were oversubscribed, which means if they had $350 million of bonds to sell they got orders for $400 million or $450 million. So they weren't able to fill all the demand. "That's a good thing for the market, because when there's competition like that it affects pricing. People will say instead of taking it at 5.5 per cent, they'll take it at 5.48 per cent. Now 0.02 per cent seems like nothing, but think of 0.02 per cent on $350 million over 20 or 25 years, that's a huge amount of money." Banks are often now competing not just to be in on the deal, but to lead the deal, she says. "That's partly profit-driven but it's also important to them for league-table purposes. It's like success breeds success, people say, 'I hear you did this big infrastructure deal and that big infrastructure deal, so you must be really good. I want to go to you to talk about doing my deal.'" Pennycook believes the red-hot interest in financing infrastructure is not just good news for projects hoping to raise money but also for the end users of the new highways, schools, power grids and the like because the lenders add another level of due diligence. "They give the government or relevant authority additional comfort that it is not only feasible but reasonable to believe that the project can be built on time, and that the budget for the construction and long-term operation and maintenance works. "This extra critical review of all the participants and their agreements, the risks and the budget, and the lenders' ongoing role in monitoring how the project is doing, adds comfort that the project will be successful." "[INFRASTRUCTURE PROJECTS] PROVIDE LONGTERM STABLE CASH FLOW IN A TIME OF UNCERTAINTY, [WITH RETURNS OF 4 TO 5 PER CENT OR EVEN HIGHER]. PEOPLE LOOK AT INFRASTRUCTURE AND THINK: 'WE NEED IT. IT'S NOT GOING ANYWHERE.'" Sandra Rubin is a freelance legal affairs writer. Lexpert®Ranked Lawyers Grant, QC, Robert G. ect berta s and ning, Gross, QC, Morton G. Gross, Wendy J. Hamilton, Peter E. Harbell, James W. Stewart McKelvey (902) 420-3328 rgrant@ stewartmckelvey.com stic Griffiths, Leonard J. Bennett Jones LLP (416) 777-7473 griffithsl@ bennettjones.com Borden Ladner Gervais LLP (416) 367-6205 mgross@blg.com Osler, Hoskin & Harcourt LLP (416) 862-6737 wgross@osler.com Stikeman Elliott LLP (416) 869-5564 phamilton@ stikeman.com Stikeman Elliott LLP (416) 869-5690 jharbell@stikeman.com Mr. Grant's advocacy practice focuses on corporate commercial litigation and administrative law, including project approvals. He has a special interest in energy and regulated industries, particularly oil and gas. He is an ACTL fellow. Mr. Griffiths and his environmental/energy/ First Nations team assist with projects, including complex M&A, financing, approvals and environmental assessment issues. Recognized as the leading environmental lawyer in Canada (and top 10 internationally). Mr. Gross's property development practice focuses on PPPs including those related to water facilities and toll highways, proposals on environmental and other matters, acquisitions and dispositions, leasing, joint ventures and financings. Ms. Gross's practice focuses on outsourcing and other complex transactions. Her expertise includes payment systems, cloud computing, telephony and network services, procurement, e-commerce, data protection, privacy, anti-spam, social media and IP. Mr. Hamilton's banking and corporate finance practice extends to PPPs, infrastructure, project and structured finance, financial institution regulation, derivatives and insolvency. He has lectured on banking law at Osgoode Hall Law School. ROB-Infrastructure.indd 17 Mr. Harbell focuses on energy, PPPs, infrastructure and real estate. His work includes M&A transactions, development, project finance and procurement for electricity and gas companies, utilities and government entities. 13-08-06 10:06 AM

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