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Well, the underlying assets will still be there, and will still function.

If you have a crisis caused by, to make it simple, higher interest rates, the company becomes unable to service its debt and defaults. The banks can then decide to take over the project (wipe out equity, i.e. the investors lose their money) and/or restructure - reschedule the debt, change the terms to make debt bearable. If it still doesn't fly, then banks will lose some of the money they put in (that can be done in an orderly fashion as part of the restructuring: banks cancel a part of the debt to have a chance to get the rest back). They may also start lobbying to change the underlying economics, i.e. increase prices of the services (tolls, airport fees, etc...) if set contractually rather than by markets.

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

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 30th, 2006 at 09:35:16 AM EST
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