Infrastructure Credit vs Corporate Credit

In this episode, our CEO and CIO, Randall Sandstrom explains the important factors distinguishing infrastructure credit vs general corporate credit (private and public).

The five key points:

1. Demand for infrastructure capital far outstrips the supply of infrastructure capital (the “infrastructure investment gap”).
2. Infrastructure is a defensive asset class providing essential services with relatively inelastic demand that tends to outperform industrial credit in times of economic weakness.
3. Infrastructure debt is a heavily covenanted asset class with extensive credit enhancements that are often lacking in corporate credit.
4. Often, infrastructure revenues are contracted and steadier, which decreases business risk.
5. Infrastructure lending is normally against mission critical, hard assets.

Hear how these factors contribute to infrastructure credit returns being less volatile with lower default rates and lower loss rates than general corporate credit.

Want to hear more on infrastructure and the credit market? Click here to tune in to Infra A Penny, SIMCo’s podcast channel.