MetLife Investment Management Investment Strategies Private Capital Investment Grade Private Credit European Infrastructure Debt

European Infrastructure Debt

Attractive yields and stable cash flows
 

European infrastructure debt is attracting interest from institutional investors such as insurance companies and pension funds looking to diversify fixed income allocations.

This growing asset class can offer attractive yields, stable cashflows and structural protections – as well as promoting sustainable investment.

Longer duration and typically higher yields vs the public bond market make infrastructure debt a natural match against long-dated liabilities. Sectors include essential hard assets such as renewables, utility networks, transportation, and digital.

European infrastructure debt is typically investment grade1, providing a degree of resilience through economic cycles with historical spread premiums over public corporate bonds, incremental income opportunities and historically low credit losses.

Structural protections include:

  • Pari passu with other senior debt
  • Financial covenants not obtainable in the public bond market, with call protection and a legal contract governing all private placement issuance
  • Opportunity for investors to conduct in-depth due diligence, generally over several weeks
  • Collateral: debt may be secured by real assets
  • Often with direct or indirect government support
We see infrastructure debt as a complement to a public fixed income portfolio – rather than an alternative asset class
ANNETTE BANNISTER
Head of Infrastructure Debt, EMEA

Investing in European infrastructure debt for over 10 years 

MetLife Investment Management (MIM) has a leading global infrastructure platform that manages €31.2 billion in infrastructure debt, €9.3 billion of that by our experienced London-based investment team (as of December 31, 2023).  

We have financed European infrastructure deals for over 10 years, originating 194 EMEA and 77 Euro transactions worth €3.45 billion since 2010 (as of December 31, 2023). 

As a long-standing investor in European private placement debt, MIM taps an extensive and deep network of market relationships to source deal flow throughout Europe. Our size and scale allows us to negotiate attractive pricing and terms.  

Increasingly, MIM has focused on direct origination, with a long-tenured team dedicated to developing issuer relationships and provide meaningful debt financing solutions directly to borrowers. 

With our rigorous credit screening process, robust risk management and sustainability verification, we have had no investment losses in European infrastructure debt to date (as of December 31, 2023). 

Key reads for Infrastructure Debt

PRIVATE CAPITAL

A Closer Look at European Renewable Energy Financing
PRIVATE CAPITAL

Infrastructure Debt and the Sustainable Development Goals
PRIVATE CAPITAL

European Infrastructure Debt Aligns with ESG Goals
INVESTOR SURVEY

European Infrastructure: Key Findings

INVESTOR SURVEY

European Infrastructure: Full Results
Leadership Team

Find out more about European infrastructure debt investing. Use this form to request access to the SFDR Article 10 website disclosure, Prospectus and Fund Supplement. We aim to respond within 24 hours.

1 Credit quality assessments are performed internally by MIM’s Infrastructure Debt team and have not been verified by independent sources. Such ratings are not recognised ratings used by other investment managers or funds, including those investing in the sectors in which MIM invests. Other ratings, including those published by an independent credit ratings agency, may be more relevant in evaluating creditworthiness or may present the credit quality of issuers or assets in a more or less favourable manner than such internal ratings do. MIM’s internal ratings are subjective; MIM has an incentive to assign internal ratings in a manner that more closely meet investor and/or yield expectations, or otherwise provides an advantage to MIM. Accordingly, such internal ratings should be viewed as one factor among other factors for evaluating creditworthiness, and you should make your own determination as to the weight you place on such internal ratings. Please contact MIM for additional information on how such ratings are derived.