By Dayan Candappa
MANAMA (Reuters) - Funding for infrastructure projects has scarcely been affected by the global credit crunch, which has dried up the flow of cash into everything from takeovers to bonds, two Islamic investment banks said.
The two banks, Bahrain-based Arcapita and Ithmaar Bank ITHMR.BH, said on Tuesday they were eyeing as much as $14 billion in infrastructure projects to be funded through private equity investments.
Both delayed plans to sell Islamic bonds last year and said credit markets had not yet recovered sufficiently to allow the sales to proceed. But both were confident of financing the infrastructure deals.
"I don't see any shortage of credit available to support those kind of investments," Michael Lee, chief executive officer of Ithmaar, told the Reuters Islamic Finance Summit in Manama.
"It is not the same kind, it is completely different. It is sort of prime lending; it is not high risk."
The credit crisis, triggered by defaults on U.S. subprime or high-risk mortgages, forced private equity firms to cancel or scale back acquisitions that are typically 70 percent financed through borrowing.
"In the infrastructure area you have much more stable cash flows, so it is a lower level of risk," said Lee.
CASH RAISING Continued...
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