The local construction industry is bracing for a series of bankruptcies at builders in a much-dreaded chain reaction prompted and exacerbated by widespread project financing (PF) failures over the past few months, industry watchers said Sunday. PF is the financing of long-term infrastructure, industrial projects and public services using limited recourse financing scheme. The debt and equity used to finance the relatively high-risk projects are paid back from the cash flow generated by the project, rather than from collateral put up before the projects. At the center of the concern is the default of a local developer of Legoland in October, which was guaranteed and operated by the municipal government of Gangwon Province. The unexpected failure to refinance the maturing debt of about 205 billion won ($159 million) led to a rapid tightening of borrowing conditions for mid- to small-sized construction firms, already devastated by post-pandemic, inflation-countering sharp key rate hikes.