(Yicai) July 5 -- Chinese real estate developers raised 26 percent less through bond issuance in the first half compared with the same period of last year, with most sold by state-owned builders.

Developers raised CNY282.3 billion (USD38.8 billion) by selling bonds in the six months ended June 30, according to the China Index Academy. State-owned enterprises accounted for 93 percent of that, up 3 percentage points on a year earlier, highlighting the difficulties private builders face in raising funds.

Credit bonds made up almost 65.5 percent of the total, a 4.2 point annual gain, with a slump in sales by private firms. Offshore bonds accounted for just 1.8 percent, down 1.1 point, while asset-backed securities made up 32.7 percent, a 3.1 point decline.

Overall fundraising costs were relatively low, but that was because the majority of issuers were SOEs. The cost of financing for onshore bonds fell 0.32 point on average compared with last yea, per data from market consultancy CRIC.

Developers face massive debt repayment in this half of the year, with the CRIC saying more than CNY100 billion will fall due this quarter. It also said builders that have already gone through debt restructuring may default again, if sales remain weak. 

The authorities should allow companies at financial and operating risk to complete their debt restructuring or bankruptcy procedures as early as possible, so as to “reshape their values,” CRIC noted. 

Editor: Tom Litting