MARTINSA-FADESA SA was the largest Spanish developer to seek protection from creditors since the decade-long real estate boom ended last year and won't be the last, according to Credito y Caucion, a Spanish credit insurer.
Martinsa failed to secure a loan that banks had demanded as part of a debt refinancing plan, which led to "grave cash-flow difficulties," the La Coruna-based company said after the market closed yesterday. Martinsa has a market value of 680 million euros (US$1.1 billion), 64 percent less than the peak reached in March.
"There are going to be more companies of this size and type seeking protection," said Paval Gomez del Castillo, a spokesman for Credito y Caucion in Madrid.
A slump in Spanish home sales, combined with rising borrowing costs, has made it harder for property companies to pay their debts.