2.2.2 Default event definition

A default event is considered to occur when an entity experiences an actual hard/soft default/bankruptcy/liquidation/asset impairment (in the past 30 years, it is a rare occurrence). Additionally, a default event is triggered when the Debt Service Coverage Ratio (DSCR) of an entity falls below 1.

In the last five years, infrastructure firms have experienced an average annual default rate of less than 2%. Instances of hard defaults are rare, with only one observed for projects during the specified period. Asset impairment is more common for both corporate and project entities.