In turn, S&P anticipates that as a result, “…up to $34bn of leveraged infrastructure loans may be left paralysed under current market conditions". Or, practically speaking, these loans could be left on the books of financing banks that will not be able to syndicate them down.”

S&P commenting on the new financing structures that have been employed in the infrastructure boom notes that they are frequently weaker than those traditionally employed and as such are not likely to fully mitigate risk. A typical structure is one that combines project financing techniques with covenants prevalent in leveraged finance facilities, hybrid lending which has facilitated the acquisition of infrastructure assets at record-breaking debt multiples. S&P gives the example of ABP which was acquired for £2.8bn ($5.2bn) with a debt multiple of 16.6 times earnings before interest, tax, depreciation and amortisation.

“Despite,” it says, “the asset’s strong monopolistic position and stable cash flows, these terms are unlikely to fully mitigate risk arising from the high level of debt. Nor,” it adds, “are they likely to mitigate market risks such as the increasing environmental and regulatory hurdles limiting ABP’s ability to expand capacity in the future.”

For the future, it is S&P’s belief that hybrid acquisitions will “…be restricted to infrastructure assets operating within monopolistic environments with stable cash flows over the long term. Moreover, high leverage should be accompanied by the necessary structural package and creditor protections.”

We see, therefore, an adjustment in the world financial markets that looks set to rein in some of the bolder style acquisitions that have taken place recently in the international port marketplace.