In the first half of this year, the construction sector expects an increase in defaults on bonds of trust. The rating agency “Credit-rating” predicts defaults for at least 10 issues of securities totaling more than 700 million UAH.

“Credit-rating” in the September-December 2009 were 17 defaults on issues of trust bonds (CO) worth about 1 billion UAH. (They all had a speculative credit rating). “When the date of maturity of the company did not have time to complete and pass the House in operation. In this case, the issuers were forced to violate the terms of the obligations or negotiate with investors to replace placed bonds for securities with a later maturity or on instruments of property rights-in-progress construction “, - said Head of corporate rating agency” Credit-rating “Andrew Kulik.

According to him, according to the expectations of the agency, in 2010, this figure could grow significantly: during the year likely to further increase the number of defaults. Maturity of most papers is in January-June 2010, and the agency expects defaults in at least ten issues of trust bond with a speculative rating level, totaling more than 700 million UAH., Said Kulik.

Most securities were issued at a time when not built unless lazy - in 2006-2007. Companies trust bonds issued for projects that are at the initial1000stage of implementation, and some projects did not even have a full package of permits to start construction. Recall the mechanism used by developers to sell square meters. The buyer who buys such bonds, was entitled to the goods (flat) instead of cash income.

And since the average period of implementation of residential property - about three years, the repayment of the principal amount of bonds of trust had the second half of 2009 and the entire 2010 According to the Credit-rating “more than 380 editions of the Central Organ for this period total volume of about 30 billion UAH. were rated as speculative grade securities: it is 85% bonds issued by the trust in the construction sector. In 2009, “Credit-rating” fixed the default on 13.4% of all issues of bonds in the target country in the amount of 1,9 billion UAH.

Given that the majority stroykompany build houses on borrowed money, the increase in defaults on the CO for the majority of analysts had forecasted. The whole past year lending crisis of the construction sector almost stopped. Demand for primary housing due to discontinuation of mortgage fell considerably, resulting in a significant reduction in the rate of work and the freezing of many projects. But according to Goskomstat, in 2009 reduced the amount of work in all major areas of construction, in particular, the amount of work to complete the construction - by 67,2%, in construction of buildings and facilities - by 48,6%, to install them in engineering equipment - 44,9%, for the preparation of building sites - for 41,4%.

“The continuing deterioration of the situation on the Ukrainian construction market due to the fall of the pace of construction and the low level of creditworthiness of a number of issuers has led to a breach of trust bonds of maturities in January 2010 rating agency has noted three cases worth about 250 mln ., “- says Andrey Kulik.

“I think for smaller developers, who are in this situation (the project is not completed - the credit is used), the situation is difficult. Since the new loan if unpaid (or late) of debts can not be trusted. The only chance - to agree on restructuring debts, which, however, does not solve the problem of additional funding to complete projects, “- said Yevgeny Grebenyuk, senior analyst with Troika Dialog Ukraine.

According to Anastasia Golovach, analyst at Renaissance Capital, the use of trust bonds - not exactly a typical money market instruments. “Defaults on such securities occur often enough. And it is more likely to default, but not defaulted on. It occurs when the developer can not enter a house in operation in time and can not repay bonds in square meters. According to her, the reasons why now this happens, a lot - from a shortage of funds for the completion of the facility by using funds raised for other projects to unduly prolonged procedure of putting the house into operation. “When stroykompanii get into a situation they must negotiate with the holders of its bonds to the postponement of delivery of homes. In fact, home buyers have become hostage to the same situation: they can not sell their bonds of trust and recourse to the courts is difficult. So often making concessions “- explained Anastasiya Golovach.