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Annual Global Project Finance Default And Recovery Study, 1980-2014

Executive Summary

The Project Finance Default and Recovery Study (“PF Study” or “Study”) is an annual update to the report published by S&P Global Market Intelligence’s Risk Services group in November 2014 analyzing the default and recovery performance of project finance debt issues worldwide. 

This study is based on an updated aggregate-data repository from a consortium of participants in the project finance market segment. While collected in 2015, the data in the Study is from 2014. The data repository includes 7,959 projects—624 defaulted and 377 resolved originated globally from 1980 to 2014. We observe that:

  • The annual default rate for the PF Study increased from 0.9% in 2013 to 1.3% in 2014.
  • The 10-year cumulative default rates for the PF Study are consistent with the 10-year cumulative default rates for corporate issuers of low investment-grade (S&P Global Ratings Corporate Issuer Credit Rating1  of ‘BBB’).
  • Marginal default rates for the PF Study, which record the proportion of projects performing at the start of the year that default in the year, are initially in-line with marginal default performance of high speculative-grade debt (‘BB’). However, by year 10 after project origination, project finance marginal default rates become more consistent with investment grade marginal default performance (‘BBB’).
  • Project finance loan recovery rates average 77% with a median of 92%.
  • Restructuring represents the most used strategy and results in the strongest recovery rate outcome of all loan remediation strategies, averaging 91%.
  • The P3/PFI2 project finance segment had a lower average default rate than the PF Study and stronger average recovery rate performance.
  • The average recovery rate for projects with Export Credit Agency (“ECA”) Facility support was slightly higher than the PF Study, but lower than P3/PFI projects.


1 S&P Issuer Credit Rating (ICR) represents S&P Global Ratings’ opinion of an obligor's overall capacity to meet its financial obligations. The opinion focuses on the obligor's capacity and willingness to meet its financial commitments as they come due. The opinion is not specific to any particular financial obligation, nor does it reflect specific statutory or regulatory preferences, nor does it reflect the creditworthiness of guarantors or insurers, or the existence of other forms of credit enhancement on the obligation.

2 Public Private Partnerships (P3), or Private Finance Initiatives (PFI), refers to infrastructure projects that are funded and operated through a joint effort of government and private business. These partnerships allow a government entity to grant a concession or right to a private consortium to design, develop, build, operate and maintain an infrastructure asset that serves a public good for a specified period, which often spans decades.