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More Chinese developers seek domestic bond issuance

Published 12/01/2021, 07:12 PM
Updated 12/01/2021, 07:41 PM
© Reuters. FILE PHOTO: Surveillance cameras are seen near a real estate project under construction in Shenzhen, Guangdong province, China November 8, 2021. REUTERS/David Kirton
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SHANGHAI (Reuters) - Three Chinese developers, including the main operation platforms of Country Garden Holdings Co and Longfor Group Holdings Ltd, plan to sell bonds in China to raise a combined 18 billion yuan ($2.83 billion), the official registration system showed late on Wednesday, evidence Beijing is marginally easing liquidity strains on the cash-strapped sector.

China tightened financing curbs on the real estate industry early this year, exacerbating financial problems at indebted developer China Evergrande Group and triggering sector-wide liquidity stress that some feared could destabilise China's economy.

In recent weeks there have been signs that some financing channels are being marginally relaxed for developers.

According to the filing system of China's interbank debt market, Country Garden Real Estate Group, controlled by Country Garden Holdings, plans to issue medium-term notes worth 5 billion yuan.

Chongqing Longhu Enterprise Development Co, the main platform of Longfor Group, plans to issue 3 billion yuan of debt.

Separately, the state-owned developer China Overseas Enterprise Development Group Co aims to issue three tranches of debts totalling 10 billion yuan, according to the registration filing.

There have been other signs of life in the domestic bond market for developers. Corporate bonds issued by real estate companies nearly tripled in November from the previous month, to 37.1 billion yuan, official China Securities Journal reported on Wednesday.

There are also signs of marginal lending relaxation. Last month, sources told Reuters financial regulators had told some Chinese banks to issue more loans to property firms for project development.

© Reuters. FILE PHOTO: Surveillance cameras are seen near a real estate project under construction in Shenzhen, Guangdong province, China November 8, 2021. REUTERS/David Kirton

But Chinese authorities have given no signal that they will relax the "three red lines" - financial requirements the central bank introduced last year that developers must meet to get new bank loans. Analysts have said Beijing will continue its deleveraging campaign against developers despite the recent policy tweaks.

($1 = 6.3673 Chinese yuan renminbi)

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