UDC 33.

336

Formation of Two-level Financial Model for a

Multi-storey Housing Complex Investment Project

Alexey Yu. Chudnovets, Alisa. S. Plisova

as.plisova@yandex.ru; science@bk.ru
+7(902)-963-3757; +7(902)-942-1718
Siberian Federal University
79 Svobodny, Krasnoyarsk, 660041, Russia

Abstract: The rapid growth of cities and urban population created a considerable need in
the construction of housing. A multi-storey housing complex, therefore, is the best possible use
of land and a guarantee of comfortable living conditions.
An investment project of a multi-storey housing complex is financed through bond
issuance, for which servicing we use savings and credit scheme: one part of financial resources is
accumulated; the other part is borrowed.

Keywords: a multi-storey housing complex, financing of investment projects, bond

issuance, a savings scheme, credit scheme.

Research area: economics.

1 Bond issuance
1.1 An enterprise issues three series of bonds whereas the value of each bond is 900
million rubles, which covers the total cost of construction. The construction period is 8 years.
The repayment of the first series should be carried out within three years; the second – in four
years and the third – in five years. Every month the enterprise repays the interest on all the series
of bonds: the annual interest rate is 9% thus the monthly share of interest payments is 0.0075.

So that we determine the formula:

A PV∗r,
Here,
A – annuity - the costs of the bond service; PV - the present value of the series; r – the
interest rate. (Pic. 1, Tab. 1)

1.2 We use 50/50 savings and credit scheme for repaying series of bonds. The savings
account for the first series is opened for a period of 3 years; at the end of this term, we have 450
million of rubles which is the half of the value of the bond. At the same time, the company
borrows 450 million at the annual interest rate of 12% to repay the total value of a series. The
constructing company repays the loan during the next 3 years. To complete the savings and
credit scheme we repeat the steps described above. (Pic. 2)
Here is the formula to calculate the present value and future value of an annuity:
1. The first savings account calculation: 3. The third accumulative account
FV1 = RUB 450 000 000. calculation:
t = 3 years, r = 0,0075 (1+0 ,0075 ) 60 -1
FM3= = 75,42
Aн – monthly payment. 0,0075

We determine the formula as follows: А3н = RUB 5 966 587.

4. The calculation of the credit:
A (1+r) n -1
FV PS =A∙ ,
r The company takes 450 million rubbles
r = 0,0075, n1= 3∙12 = 36 loan, when r = 12%.
(1+r)n -1 PV3 = RUB 450 000 000.
FM3 ( r,n ) =
r T = 3 years → n = 36
36
(1+0 ,0075 ) -1 r = 12% → r = 0,01 (monthly interest).
FM3= = 41,15
0,0075
We determine the formula as follows:
А1н = 450 000 000/41,15 = RUB A 1−(1+r)-n
PV PS =A∙ ;
10 935 601. r
2. The second accumulative account 1- (1+r)-n
FM4 ( r,n ) =
r
calculation:
Using this formula, we calculate:
(1+0 ,0075 ) 48 -1
FM3= = 57,52 1- (1+0 ,01 ) -36
0,0075 FM4= =30,11
0,01
А2н = 450 000 000/57,52 = RUB 7 823 366.
A3к = RUB 14 945 201.

1.3 The given charts (Pic. 3, Pic. 4, Pic. 5) clearly demonstrate that combined savings and
credit scheme optimizes and reduces the financial burden on the constructing company during
the term of repayment of the loan. Correlating the repayment burden with the calculated
operating income within savings and credit scheme, we can conclude that the implementation of
the investment project of a multi-storeyed housing complex is possible because company
revenue exceeds bond issuance expenses.

In conclusion, I would like to note that the practice of bond issuance as the source of
loan repayment is not widespread in Russia. The proposed financing plan of multi-storeyed
housing complex can be an effective alternative to an escrow account.
Summing up, a bonded loan can rapidly generate necessary financial resources for
constructing at the outset of the project and application of savings and credit scheme can reduce
the financial burden of loan repayment.
 1000000
800000
600000
400000
200000
III
0 I

I II III Total

Pic. 1 – Quarterly schedule of interest payments on bonds

Tab. 1 Quarterly schedule of interest payments on bonds, in thousands of rubles

Bond series I II III Total

I 20250 20250 20250 60750
1st year

II 20250 20250 20250 60750

III 20250 20250 20250 60750
IV 20250 20250 20250 60750
the quarterly payment, thousands of rubles

I 20250 20250 20250 60750

2nd year

II 20250 20250 20250 60750

III 20250 20250 20250 60750
IV 20250 20250 20250 60750
I 20250 20250 20250 60750
3rd year

II 20250 20250 20250 60750

III 20250 20250 20250 60750
IV 920250 20250 20250 960750
I 0 20250 20250 40500
4th year

II 0 20250 20250 40500

III 0 20250 20250 40500
IV 0 920250 20250 940500
I 0 0 20250 20250
5th year

II 0 0 20250 20250
III 0 0 20250 20250
IV 0 0 920250 920250
Pic. 2 – Cash flows of the savings and credit scheme

Payment schedule of saving and credit scheme

50000000
45000000
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0

2020 series 2021 series 2022 series Total repayment

Pic. 3 – Payment schedule of the savings and credit scheme

 90
80
70
60
50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Savings and credit system expenses interest payment expenses

Total income

Pic. 4 –The ratio of income to expenses of bond issuance and savings and credit scheme

90
80
70
60
50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Total expenses of bond issuance Total income

Pic. 5 – The ratio of total income to overall costs of bond issuance

References

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financing scheme for bond loan servicing [Primeneniye nakopitel’no-kreditnoy skhemy
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obsluzhivaniiu vypuska obligatsiy]. Materialy mezhdunarodnoy zaochnoy nauchno-
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