Overall, the creditworthiness of infrastructure project finance transactions is strong, says Standard & Poors in a recent credit FAQ on operation and maintenance risks (O&M). But bondholders still are at full risk of default on highly leveraged P3 projects that run into performance problems during the very long-term agreements typical of large transportation P3s.

Those risks generally drive credit ratings for performance-based availability projects below the rating of the government sponsor, says S&P’s Jodi E. Hecht, even though the sponsor is the sole source of project revenue.