Friday, February 27, 2009

Obama's National Infrastructure Bank to Loan to PEU's?

President Obama included $5 billion in his budget for a National Infrastructure Bank. It will provide $25.2 billion through 2019. The budget document states:

"The mission of this entity will be to not only provide direct federal investment but also to help foster coordination through state, municipal and private co-investment in our nation's most challenging infrastructure needs."

Public-private partnerships will be funded by the NIB. Numerous private equity underwriters have billions ready to invest in infrastructure, using Uncle Sam's levered capital.

The Carlyle Group--$1.35 billion

Blackstone Group-$2 billion

KKR-$5 billion

Macquarie-$12.4 billion

In 2008 $34.9 billion was raised for infrastructure by 18 firms. That grew to an expected $94 billion in 2009. The Obama bank supplies the leverage for the next round of PEU profits.