The Situation

Posted on April 3, 2024 in News

This situation affected the market? Absolutely. Lack of financial control over cash flows has created opportunity for some developers "Take advantage" of the situation than was inflicted great damage to the building market and the relationship of philosophy "the customer-investor." Retention of investment has caused the exodus of investors from participating in construction. On the other hand has forced developers to seek new, more reliable and transparent schemes to attract investors. The current situation could not but affect negatively on the general investment climate and asked the legislator to adopt new regulations and rules of this process. Source: Stephen M. Ross. Solution of the problem was the adoption at the legislative level of the ban on residential buildings, investment activity in which a use of non-state funds raised from individuals and entities prohibited. In this case, was established exclusive list of possible forms of investment in construction. One such Forms which are widely known, was the release of non-interest (target) of bonds for which the underlying commodity serves the property.

What has changed since the issuance of securities? Construction market and its participants to acquire the elements of the stock market. Issuers of bonds, their sellers, and investors began to regulate their activities Law on Securities (CB) and the stock market, and the mechanism of acquisition in ownership of the property through the acquisition and further the bonds began to look as follows. The builder object to raise additional funds shall issue registered interest-free (Target) bonds – securities evidencing payment of their owners money, as well as its obligation to pay the face value of the bonds within the prescribed period.