Pillsbury has lured a pair of project finance lawyers from global behemoth DLA Piper to its offices in New York. Nicolai Sarad and Fernando Rodriguez-Marin come to Pillsbury as partners. Both lawyers have a transactional practice with a focus on global energy and infrastructure. They advise clients on a range of matters including public-private-partnerships, project development, financing, and restructurings.
In a discussion with IFLR1000, Sarad said that in today’s project finance market, and when it comes to infrastructure in particular, the debt capital markets are instrumental. Although bank financing is still very much around, Sarad identifies tax-exempt private activity bonds, or so-called project bonds, as the financing technique du jour in U.S. transportation infrastructure as well as Latin American deals.
“In the U.S. recently, the market has picked up for road projects, and now we’re seeing more projects which we consider to be social infrastructure coming to procurement,” Sarad observed.
Sarad characterized infrastructure in the U.S. as in a bad state generally, identifying a need for billions of dollars to rebuild roads, schools, and courthouses. He said that even through the economy is improving, a majority of states lack the money for transformative public projects. Hence there are opportunities for the P3 model.
“Even though the economy is improving, most of the states don’t have the funds for large-scale public projects. That opens the door for the P3 model in the U.S. We’re seeing also, on the periphery, a number of smaller-scale projects; for example, in water and waste management as well as parking, which support the sense that the market is growing and Americans are coming to understand and accept the P3 model,” Sarad commented.
In the absence of a single federal legal regime controlling the P3 platform in the U.S., the promulgation of P3 laws in the U.S. follows different patterns from state to state. In Sarad’s view, every state needs infrastructure development. While there will continue to be projects priced locally through the muni bond system, Sarad said that the larger the scale of a project, and the higher its capital needs, the greater the usefulness of the P3 model.
Sarad’s practice involves extensive transactional work in Latin America, and he identifies Brazil, Peru, Chile, and Mexico as strong jurisdictions for projects in recent years, Peru and Chile in particular.
“Mexico has high hopes; they have new energy legislation but actual transactions are taking a bit longer than everyone might have hoped to occur. Brazil has had some challenges, but we’re seeing, as a firm, a lot of activity for our clients in Brazil. Other markets are beginning to grow. Colombia, for example, is probably the next Peru. Everyone has high hopes for the project market there,” Sarad said.
Sarad holds a J.D. from the University of California at Berkeley, an M.A.L.D. from the Fletcher School of Law and Diplomacy at Tufts University, and a B.A. from Reed College. Rodriguez-Marin holds an LL.M. Harvard Law School, and has also studied at the Universidad de Sevilla in Spain.