Chanticleer
Low rates fuel bid frenzy
As long as interest rates remain low, the world’s largest investors will seek to privatise the last remaining producers of reliable cash flow.
With 10-year government bond yields in Australia, Canada and the United States ranging between 1.3 per cent and 1.6 per cent, the steady cash flow yields available from Australian infrastructure were a no-brainer for predators.
With internal rates of return of about 7 per cent, it is no surprise that Spark Infrastructure and AusNet Services are about to leave the ASX at enterprise values of $10 billion and $15 billion respectively.
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