Project Finance Collateralized Debt Obligations

Abstract

Project-finance collateralized debt obligations (CDOs) will allow portfolio investors a greater opportunity to participate in power and other infrastructure debt markets and will bring additional liquidity and transparency to such markets. Project-finance CDOs also will allow commercial banks, which have a long and successful history with project finance, to better manage their balance sheets and asset-liability mismatches. This article reviews the structures and features of a CDO and why project-finance debt is an attractive asset for a CDO.