Restoration 2006

1
Restoration 2006
Community and Economic Recovery After a Disaster
Roundtable re Market for Equity/Private Capital
for Infrastructure
New Orleans, Louisiana May 16 - 17, 2006
2
Table of Contents

• Meeting Public Infrastructure Needs With Private
  Capital
• Financing Structures
• Choosing The Financing Options
• Parameters Of Private Capital

3
Meeting Public Infrastructure Needs With Private
Capital

• Excess of capital looking for investments
• Capital market tools
• Equity
• Subordinated and mezzanine structures
• Variety of debt structures
• Several traditional and non-traditional capital
  market sectors
• Institutional Investors
• Banks
• Specialty Funds
• Hedge Funds
• Fitting types of capital to specific financing
  structures

4
Tax Exempt Structure
Public-Sector Entity
Disclosure
Design Build Agreement
Lease Agreement
Muni Bond Markets
SPE
Operator/ Service Provider
Securities
OM/Service Agreement
Funding
(Fixed Fee)
Design Construction Agreement
Sub-Contractors
Design Builder
5
Taxable Structure
Shareholders/ Equity Agreement
Public-Sector Entity
Investors
Concession/Project Agreement
Equity Funding
Long Term OM/Service Agreement
SPE
Operator/ Service Provider
(Incentive Compensation)
Securities
Debt Funding
Design Construction Agreement
Sub-Contractors
Design Builder
6
Choosing The Financing Options

• TAXABLE
• Procurement methodology
• Ownership in private entity
• Existing debt consideration
• Project economics
• Political issues
• Return on equity
• Public sector oversight

• TAX EXEMPT
• Procurement methodology
• Issuing entity
• Private activity bond issues
• Qualifying management contract
• Design/Bid/Build approval

7
Choosing The Financing Options

• TAXABLE
• More flexibility
• Fast track resulting in cost savings
• Large investor base
• Potential for operational savings
• TAX EXEMPT
• Low interest costs
• More control
• Politically attractive

8
Parameters of Private Capital

• Allocation of Risks
• Equity return in 10-15 range for quality
  projects
• Fund returns in 16-20 range
• Subordinated and mezzanine in 8-14 range
• Debt costs in range of 85 to 200 basis points
  over US Treasuries

9
Contact Information
Anita Molino Principal
264 Beacon StreetBoston,
Massachusetts 02116(p) 617-437-0150(f)
617-437-7080 amolino_at_bostonia.com