[Click eStock] "Taeyoung Construction Incident, Limited Potential to Trigger Large-scale PF Crisis"

On the 2nd, IBK Investment & Securities stated regarding the construction and real estate sectors that "the workout of Taeyoung Construction is unlikely to lead to a project financing (PF) system risk."

Taeyoung Construction applied for a workout on December 28 last year. The company's PF guarantee scale reached 3.6 trillion KRW as of the end of November on a separate basis.

Researcher Jo Jeong-hyun noted, "Currently, construction companies face more difficulties in fund circulation compared to other industries, but since the period of rapid liquidity absorption has passed, the possibility of a large-scale refinancing risk occurring in the short term, as in the past, is low."

He added, "We expect a soft landing due to existing market stabilization programs such as corporate bond and commercial paper (CP) purchases, primary collateralized bond obligations (P-CBO), and the increase in the bond stabilization fund," emphasizing, "The workout of Taeyoung Construction is one of the conclusions of the year-long real estate market slowdown and is unlikely to become another cause of crisis."

However, he diagnosed that it is difficult to rule out liquidity crises for individual construction companies. Researcher Jo said, "There is a possibility of liquidity crises occurring for individual construction companies," adding, "According to Korea Credit Rating, the scale of bridge loans remaining unstarted after permits due to the continued real estate market slowdown amounts to 12.7 trillion KRW."

He continued, "Ongoing PF projects under construction continue to face financial pressure due to sustained cost burdens and low pre-sale rates," and added, "For companies focused on housing, liquidity pressure is expected to persist."

This content was produced with the assistance of AI translation services.