We climbed out of Covid in 2021 and then we climbed back in. At the time of writing the chief medical officer in England is suggesting we will be out of it by mid 2023 when a new all encompassing vaccine is produced. The logic being presumably Covid can be defeated just as the common cold and the flu have, of course, been defeated. Very very laudable or a definition of madness. Impact on project finance? Let's get back in.
In the run up to year-end, cocktail parties, events, etc, were all merrily taking place. The Ashurst party in London in November, for example, was said to be packed as project professionals took to the streets, well took to the evening reception circuit, in order to meet and greet once again.
The first event I attended was an IPFA do in early September at Allen & Overy's offices in Spitalfields – and very enjoyable it was too. Someone called Nick Chism had just been installed as the chair, although he gave his intro speech standing up. Food was great, drink free and there were lots of people around. In addition, A&O supplied me with enough face masks to last a lifetime. There was apparently a competing event going on in the bowels of Waterloo that night but it cannot have had many takers.
Around Shoreditch and Spitalfields, the area was buzzing. Walking home, I could not stay on the pavement as so many (young) people were around. I happily went to see Hamilton shortly afterwards, crammed into the theatre with 500 or so. And that was it, off we go. Offices started to fill up, albeit not as quickly as I had assumed would occur. But if ever an industry needed to get out and about, or indeed to get stuck in long all-day meetings in person, it is the project finance industry.
Or maybe I am being old-fashioned? When it comes to putting large debt syndicates together, potential investors are now kept very separate until financial close. They certainly do not get involved in negotiations on terms. In the liquid market we have now that is a entirely possible approach, although if the worm turns and liquidity shrinks, that approach would have to be modified, ie, dumped. That said, surely for the smaller and club deals, indeed for the larger deals that still need a lot of back and forth negotiation before syndication, in-person meetings are so much better.
Zoom, etc, might well be key tech innovations but plenty of negotiators have said complex project financings are being slowed down. Deals, for example, involving a mix of multilaterals and the public and private sectors, slip into non-decision mode.
From my own personnel experience over the last year and a half I have certainly learnt a lot more being in the office rather than stuck at home. You might just bump into people, colleagues away from your direct day-to-day job. So I have been surprised that there has not been a mass exodus back into the office. From the events I have been too, it's clear everyone wants to get chatting again.
That was certainly the case at Norton Rose – the lawyers once again – when it held an appreciation of the life of Jon Ellis in early December. An enjoyable remembrance. One person who certainly suffering being locked down was former MUFG PF head Andy Jameson. Instead of going to the Tokyo Olympics this summer as the BBC's swimming commentator, he was stuck in Salford commentating from 1.30am in the morning for 10 hours. On one memorable day he spent more than a hour discussing the imaginary birdlife in Tokyo Bay with fellow Olympian and co-commentator Adrian Moorhouse as the competitors circled the bay in what sounds like a very long race. At least when Henry Blofeld was discussing Harleyford Road, he could see it from his Oval commentary box.
I was actually able to commiserate. We on PFI have had to move our Financing Energy Projects in Asia (FEPA) online over the last couple of years. Not quite the Raffles Hotel but needs must. I had to get up at 1 am, I told Andy. "But not for two weeks," he replied, still seemingly a little scared by his experience. For the 2022 event we are planning to get FEPA back as a physical event. Surely it should be OK? And we are planning to get our PFI Awards Dinner back – let's get physical, as Olivia Newton-John used to say. We have pushed the event into May as a) we had assumed the European winter could be virus friendly and b) the hotel is being refurbished, so that was that anyway!
That said, online events now do have their place and we on PFI have hosted a few successful ones this year including FEPA. Mitchell Silk, fresh from his stint in the US government, took part in one in September on the prospects for the US infrastructure market post the Biden infra bills. He had been in touch re referencing some articles for a book he was writing. And then in flash a few months later the book, Dancing with Giants, is out on Amazon. Decision-making might be slow these days but content uploading is ultra quick.
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