Down Under dominance

In the first quarter of 2012, Spanish bank BBVA had come under pressure from two Japanese banks – SMBC and Mitsubishi UFJ – as it strove (successfully in the end) to hold onto its customary position as the leading mandated lead arranger (MLA) globally in the project finance space. In the second quarter, the threat – again successfully repelled – came from Australia.

With just over $1.2 billion of lending activity in the second quarter, BBVA remained at the top of the tree. However, the likes of National Australia Bank (2nd), Australia and New Zealand Banking Group (3rd) and Commonwealth Bank of Australia (8th) were all in close attendance.

The reason for this can largely be explained with reference to the ‘top 10 infrastructure projects’ table, which is dominated by the near-$13 billion financing of the Australia Pacific liquefied natural gas (LNG) project – around three times larger in size than the refinancing at UK airports operator BAA, which earns second place in the table. All of the banks mentioned in the above paragraph were part of the banking consortium for APLNG.

Furthermore, this was a quarter dominated by Australian activity – aided by financings at the Loy Yang power station in Victoria as well as APLNG. With almost $22.5 billion of activity during the three-month period, Australia was a long distance ahead of any other global market. In a broader context, with a number of privatisations to come through the pipeline, this could be quite a year for infrastructure investment in the ‘Lucky Country’.

After a period in which it had dominated the country table due to a string of high-profile PPPs, France has seen the brakes applied to its PPP programme – and its place in the table suffer as a result. It was only the seventh-most-active market in the second quarter, sandwiched between Italy and Morocco. After a slump in the first quarter, the UK recovered to second this time around.