Indiana Toll Road (B): Will Winner’s Curse Strike Again?

Published 27 May 2016
Reference 5828
Region North America
Summary

In September 2014, the Indiana Toll Road (ITR) in the US Mid-west, privatized as a 75-year concession at an impressive price of US$3.8 billion only nine years earlier, filed for Chapter 11 bankruptcy , having chalked up US$6.3 billion of debt. In the subsequent sell-off the ITR managed to attract an even bigger bid than before - of US$5.72 billion.

Teaching objectives

The valuation of infrastructure assets; determining the right discount rate; pros and cons of public-private partnerships; the "winner's curse".

Keywords
  • Toll road
  • Infrastructure
  • Public-Private Partnership (PPP)
  • Project finance
  • Privatization
  • Step-up swap
  • Inner's curse
  • Q31516
  • Corporate Governance
  • Auditing, Risk Control and Performance
  • Q31516