(자료: International project finance; 2018.2.25)
트럼프 행정부의 세제개혁과 관련하여 public-private partnership 프로젝트의 사업추진자들은 기대수익의 감소를 방지하기 위한 새로운 사업구조를 강구하는 등 분주하게 움직이고 있는 실정이다.
While the tax bill, signed just before year-end, retained private activity bonds (PABs), which are crucial to deals, a problem arises because it reduced the deductibility of net interest expense on debt. The reduction, from 100% of a company’s adjusted taxable income to 30%, will significantly lowers profit for those on the private side of transactions.
The change applies to special purpose vehicles set up by equity investors for all P3 projects, including those that have already reached financial close.
While the change seemed to bring up little industry debate as tax legislation was being crafted and refined, its reality recently sunk in for the major players on the private side of infrastructure deals, particularly those with availability payments.
These types of transactions are typically the most highly levered in the US project finance, and are therefore likely to feel the most acute impact.
Upon initial analysis of the tax reform changes, there is some agreement that the negative effect on equity returns from the deductibility change will counteract the positive impact from lower corporate taxes and therefore lead to higher prices for P3 projects.
The changes may result in a re-evaluation of equity interests in closed availability payment deals, with sell-offs possible. Several availability payment-based deals closed in recent years, including the I-4 Ultimate in Florida, the Port of Miami tunnel, and the Goethals Bridge, among others.
Social infrastructure transactions will also be impacted, including UC Merced and the Long Beach Courthouse and Civic Center projects.
Some major infrastructure players have been working with their legal teams to investigate the idea of setting up structures that would work like not-for-profit corporations in an attempt to restore profitability in deals.
In particular, some have been looking into financing mechanisms enabled by the Internal Revenue Service (IRS) revenue procedure 2016-44. The IRS statement offers US state and local governments a blend of tax-exempt governmental bond financing and access to life-cycle benefits under the P3 model but has been largely ignored by the market.
Real estate investment trust (REIT) or REIT-like structures are being explored because the tax law keeps the 100% deductibility of interest payments for real estate companies. Some in the market think infrastructure P3s may eventually be classified in a way that will allow them to qualify for that real estate exemption.
The tax law changes have already impacted Los Angeles World Airports (LAWA)’s automated people mover project. The project was awarded to LINXS, led by Fluor, Balfour Beatty Investments, Hochtief PPP Solutions, and ACS Infrastructure Development in January. The team was selected after teams were required to resubmit final bids incorporating the tax reform changes immediately after the bill was passed on December 20.
The market is grappling with how best to align itself to take advantage of any project finance activity that may arise from the Trump administration’s long-awaited infrastructure plan.
On February 12, the White House finally unveiled the 53-page “Legislative Outline for Rebuilding Infrastructure in America”, which includes US$100bn for direct grants to local governments to help trigger investment, US$50bn for projects in rural areas in the form of block grants, and US$20bn to large projects that can “lift the American spirit”.
The plan includes US$30bn for expanding existing infrastructure programmes such as the Transportation Infrastructure Finance & Innovation Act (TIFIA), Railroad Rehabilitation & Improvement Financing (RRIF), Water Infrastructure Finance & Innovation Act (WIFIA), and private activity bonds (PABs).
PAB eligibility will be expanded to new-build hydroelectric and flood control projects, as well as broadband, among others that were previously ineligible asset classes.
The plan eliminates the alternative minimum tax preference on PABs and gets rid of state caps on issuance.
The White House’s goal of streamlining permitting is addressed with the proposed launch of the expected “One Agency, One Decision” approach. The administration aims to cut the approvals process to two years for projects that had typically been expected to take five to 10 years.
S&P said the “flipped funding approach” to infrastructure proposed in the Trump administration’s infrastructure plan “could propel innovation”.
The approach challenges state and local governments to come up with at least 80% of funding rather than taking that amount from the federal government.
In a report entitled “President Trump’s Infrastructure Plan: A Substantive Shift To Private-Sector Funding”, the rating agency said it expect the early adopter states and local governments will fall into two “buckets” - those that have capacity and willingness to issue additional debt to capture the federal grants and those that are looking for creative solutions to specific projects.
“This could include collaborating with the private sector, for example, by tapping user charges such as tolling as a way to support investment and insure funding for ongoing upkeep,” the report said.
Moody’s thinks a significant uptick in infrastructure spending is unlikely before the end of the current presidential term due to three factors.
“First, a bipartisan agreement on an infrastructure bill is unlikely to materialize quickly and will likely entail some modification of the current proposal,” the rating agency predicts. “If the bill’s passage is delayed into 2019, the degree to which it resembles the Trump administration plan would be greatly influenced by the outcome of the midterm elections.”
Second, the rating agency pointed to the need for state and local governments to identify funding sources to leverage federal dollars and pointed out that funding constraints at the state and local levels may limit the amount of investment.
“Finally, moving significant numbers of new projects through the approval and construction stages would take considerable time, possibly up to two years per project,” it said.
