RT Journal Article
SR Electronic
T1 The Allocation of Financial Instruments to Project Activity Risks
JF The Journal of Structured Finance
FD Institutional Investor Journals
SP 21
OP 33
DO 10.3905/jsf.2003.320291
VO 8
IS 4
A1 Tony Merna
A1 Fook Long Steven Khu
YR 2003
UL https://pm-research.com/content/8/4/21.abstract
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.