Chinese Property Developers Eye USD3.5 Billion in Mini Bond Boom
Liao Shumin
DATE:  Apr 12 2019
/ SOURCE:  yicai
Chinese Property Developers Eye USD3.5 Billion in Mini Bond Boom Chinese Property Developers Eye USD3.5 Billion in Mini Bond Boom

(Yicai Global) April 11 -- A string of Chinese real estate firms have unveiled plans to raise a combined USD3.5 billion through bonds in quick succession this week.

Evergrande Group unveiled on April 8 that it wants to raise USD2 billion through the bond market, and within 24 hours was followed by a host of peers looking to borrow smaller amounts.

-  Sunac China Holdings -- USD750 million

-  Redsun Properties -- USD300 million

-  5i5j Holding Group -- CNY2 billion (USD298 million)

-  Yuexi Property -- HKD1.1 billion (USD140 million) in convertible bonds

-  Modern Land -- Offered to swap out existing bills worth USD500 million for a new issuance

Chinese developers have been continuously raising money since the end of last year, with several months in 2019 seeing a funding tally of over CNY100 billion (USD15 billion). Some 85 firms raised over CNY120 billion in March, up 13.7 percent on the year, and plans over the first 10 days of April have already tallied nearly CNY100 billion.

China's central bank has lowered the reserve requirement ratio five times since the beginning of 2018 in order to enhance interbank liquidity, Fang Ling, director of corporate research at China Real Estate Information, told state-run China News Service.

This is the main reason behind the rapid rise in funding, developers are looking to use this window of opportunity as an easy way to grab cash and are more willing to issue bonds now their older bills are starting to mature, he said.

Property developers around the world can wave goodbye to double-digit interest rates, Centaline Property's Chief Analyst Zhang Dawei told CNS. Typical rates now are between 6 percent and 8 percent, he added, saying that in China it costs less than 5 percent for them to borrow.

Editor: James Boynton

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Keywords:   Real Estate,Financing,Bond