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because these financial products are extremely complex and should not be bought simply on the basis of a rating. It takes a lot of analyst power to get comfortable with the underlying risk and such analysis should not be subcontracted.

Also, the lending group will need to take a lot of decisions during the life of the project, and project engineers should expect to be second guessed by a "parliament" of unknown investors who may or may not be available and who may or may not have the ability to understand what's at stake and what needs to be done. You need a small group of lenders managed by an agent who' able to do it job. Diffuse investors don't provide that. It creates very real operational risk, and I could give you several exemples from my recent projects where having to deal with more than a few other banks would have been a nightmare and would have put the project in serious trouble.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Jan 3rd, 2010 at 01:13:49 PM EST
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