PT  - JOURNAL ARTICLE
AU  - Tony Merna
AU  - Fook Long Steven Khu
TI  - The Allocation of Financial Instruments to Project Activity Risks
AID  - 10.3905/jsf.2003.320291
DP  - 2003 Jan 31
TA  - The Journal of Structured Finance
PG  - 21--33
VI  - 8
IP  - 4
4099  - https://pm-research.com/content/8/4/21.short
4100  - https://pm-research.com/content/8/4/21.full
AB  - The types of financial instruments available for financing proj-ects have always been of concern to investors and promoters. In many infrastructure projects, the debt-equity ratio is seen to be a measure of the risk in that project; the greater the risk, the greater the amount equity sponsors are compelled to invest. However, the defined debt-equity structure does not provide a breakdown of the financial instruments associated with the risk identified on each project activity. This article examines the allocation of financial instruments, those being senior debt, mezzanine/subordinated debt, and equity. An example shows the way this mechanism is used.