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01 November 2002
Banks have been chastened by the dismal performance of utility-related project loans. Market sentiment is that there is nothing like running a power plant to sharpen the mind. By Christopher Perry.
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As creditworthiness among energy companies vulnerable to their
unregulated arms continues to take a thrashing, bankers predictably
tend to put the best face they can on the situation. But they
cannot deny the devastation and admit they are trying everything
possible to limit the damages to their portfolios underneath a
landslide of refinancings and worse. While new utility project
lending is off the agendas of project finance bankers, particularly
if merchant-related, selective lending for transactions that hone
to fundamentals remains feasible ? if few and far between.
?We tend to be more fortunate than others because we're not in
every bad deal, we're only in a few,? says Bruno Mejan, head of
structured finance at NordLB's New York branch, with a resigned
laugh. A ?selective? approach toward energy deals helped, and ?we
were not as aggressive as some of our competitors,? Mejan says.
Most of the assets in NordLB's portfolio are completed or almost
so, unlike...
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