Issue Focus

● Recently, concerns about the possibility of insolvency in real estate PF have been raised in earnest. - Real estate PF refers to a method of raising funds necessary for the promotion of a real estate development project through PF. Domestic real estate PF consists of ① a tiered loan and repayment structure of bridge loan-main PF-group loan and ② credit enhancement of the construction company as collateral. The main feature is the nature of a secured loan - Real estate PF projects have been promoted nationwide amid favorable trends in the real estate market over the past few years. The ways in which financial companies participate in the real estate PF market have diversified, the scale of PF supply has also increased significantly, and the relationship with the capital market through securitized securities has been strengthened. Connectivity is very high - Therefore, as the profitability of real estate PF projects began to deteriorate, signs of the possibility of a crisis in real estate PF projects began to be detected in earnest, centering on the bond market, which was already in a crisis phase. ● The government is taking various measures to mitigate the market shock caused by the insolvency of real estate PF. - Since the middle of this year, the ‘Legoland Crisis’ has occurred in a situation where a credit crunch has already occurred in the capital market. As the credit crunch in the bond market worsened significantly, the government announced measures to supply liquidity worth KRW 50 trillion and KRW 95 trillion, respectively, on October 23 and November 1. ● As government policies are focused on stabilizing the financial market, there are some limitations in terms of crisis response. - Since the government's measures focus on support for corporate bonds or financial debentures of large corporations with high credit ratings, real estate PF projects have limitations as a liquidity supply device, except for some large-scale blue-chip businesses, and in particular, there are concerns about the possibility of insolvency of main PF. There are insufficient aspects as countermeasures ● In detail, ① drastic easing of the accumulated excessive real estate regulations, ② reinforcing measures to prevent insolvency in principal PF and establishing a liquidity supply system for construction companies, ③ launching a public debt restructuring program to early clean up insolvent businesses, and ④ recent government It is necessary to seek and implement various countermeasures, such as absorbing the supply of PF projects linked to the housing supply policy announced by