(Yicai Global) Sept. 23 -- CIFI Holdings Group, Longfor Properties and three other private Chinese real estate developers have issued CNY6.2 billion (USD873 million) worth of bonds in the past month that have been granted ‘full, unconditional and irrevocable’ guarantees by a state-owned credit enhancement body, Yicai Global learned from an industry source.
CIFI secured CNY1.2 billion (USD169 million) through the issuance of three-year bills on Sept. 21 at a coupon rate of 3.22 percent, the lowest rate that the Shanghai-based homebuilder has ever sold on the open market.
The notes are supported by state-owned China Bond Issuance’s guarantees, which is backed by the National Association of Financial Market Institutional Investors. Set up in 2009, China Bond Issuance helps low-grade credit issuers, especially smaller firms, solve financing difficulties. It also forms risk sharing mechanisms on the inter-bank bond market and conducts professional risk management of its businesses.
Another four private developers, Longfor, Midea Real Estate Holding, Seazen Holdings and Country Garden, have each issued medium-term bonds worth between CNY1 billion and CNY1.5 billion in the past month, with coupon rates ranging between 3.2 percent and 3.33 percent.
China Bond Issuance's involvement enables high-quality developers to realize reasonable financing, prevent their financial conditions from worsening and is conducive to the recovery of market confidence, Zhang Jiqiang, a fixed income analyst at Huatai Securities, told Yicai Global.
Agile Group, Excellence Group, China SCE Group Holdings and some other private property firms are also in talks with China Bond Issuance to get similar fundraising support, company insiders told Yicai Global.
NAFMII holds a 1 percent stake in China Bond Issuance, and six other state-owned institutions, including oil major China National Petroleum Corp., steel giant Shougang Group and chemicals producer Sinochem Holdings, each have 16.5 percent equity, according to business registration information.
Editors: Tang Shihua, Kim Taylor