What to do to construction company for increase of appeal of bonds?
Bonds of construction company
Article about problems of an exit to public securities market of construction companies.
As a rule, the large banks which are often financing construction sector or specifically to the company – issuers become the main purchasers of bonds of construction companies, sometimes such loans (in housing construction) can be calculated on individuals, in case of possibility of converting of papers of loans in square meters of the area. However any investor all the same regards such issuer as the issuer with a high risk level.
The main lack of such option as acquisition of bonds converted in meters, is not a prorabotannost of such schemes that strongly reduces their appeal and the majority of private investors prefer the traditional bank credits or a mortgage. The large investors interested in control over realization of processes of construction as a whole, prefer implementation of direct investments in projects or participation in the company capital that brings in noticeably the bigger income, than the income on bonds.
Many pay attention of the borrower to information openness of the issuer, its transparency. Thus, the issuer should aspire to creation of more attractive image, including in the field of information transparency of business in the field of management, financial policy, development prospects, etc.
For the borrower the choice of a form of investment is defined first of all by its purposes, and also desire to allow the investor to participation in investment process, and further and in the capital. Issuing bonds, the construction company gets from the involved means profit more than the investors getting bonds.
After all for today ratios profitability risk on construction bonds goes it is not good for investors. Risks of this grow remain all also high, and profitability of investments decreases. Therefore bonds do not represent a great interest neither for private, nor for large investors.
As well as in 2010, in 2011 investors are ready to be got such bonds only with a sufficient award for risk of the issuer.
Advantages in this sense bonds of some developer companies which are engaged in development of real estate possess and occupy steady position in the market. Activity of such companies in itself has diversified character that reduces their risks.