50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

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

© 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

USD/CNY
0.06%

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.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

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)

Which stock should you buy in your very next trade?

AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar?

Unlock ProPicks AI

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.