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Selected Case

published: 27 May 2016

  • Topic: Economics & Finance
  • Industry: Infrastructure
  • Region: North America

Abstract:
In September 2014, the Indiana Toll Road (ITR) in the US Mid-west, privatized as a 75-year concession at an impressive price of US$3.8 billion only nine years earlier, filed for Chapter 11 bankruptcy , having chalked up US$6.3 billion of debt. In the subsequent sell-off the ITR managed to attract an even bigger bid than before - of US$5.72 billion.

Pedagogical Objectives:
The valuation of infrastructure assets; determining the right discount rate; pros and cons of public-private partnerships; the "winner's curse".

Keywords:
Toll Road, Infrastructure, Public-Private Partnership (ppp), Project Finance, Privatization, Step-Up Swap, Inner's Curse, Corporate Governance, Auditing, Risk Control and Performance

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