Some bond providers are warning firms will now find it much more difficult and costly to raise bonds as a result of the fallout.

Surety capacity is being constrained as providers seek to manage risk, and brokers now warn that contractors with tight headroom on balance sheets could even be refused bonding.

Henry Construction is believed to have had over £150m of bonds “live” at the time of entering administration, spread among 13 surety providers.

The hit taken from the £400m revenue contractor’s collapse is broadly equivalent to one year’s premium throughput in the non-bank surety market.

Chris Davies, managing director of broker DRS Bond Management, said: “The demise of Henry has bombed the market for probably a year to 18 months.

“It was a once in 10-year event for a company of this size, but comes off the back of already high levels of corporate insolvency over the last 18 months.

“The surety market has taken a big hit and now we are seeing bond capacity tightening appreciably. The next year or so is going to be difficult to say the least”

” Everything will be scrutinised much more closely, particularly for bonds over £1m or where expiry is beyond practical completion,” he added.

Bonding to net worth ratios, which determine the bonding ceiling for a contractor, have fallen from around 70% of the balance sheet worth, down to 40-50% per surety.

Davies said that bonding over £1m was now being spread across two or even three providers making it harder for contractors to secure.