The financing channels are gradually repaired, and the overseas debt of real estate companies ushers in the dawn
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Affected by the Spring Festival holiday, the amount of real estate financing in January declined year-on-year, but the rate of decline narrowed year-on-year. The monitoring data released by the China Index Research Institute on the 7th pointed out that industry financing has entered a relatively stable stage, and overseas debt has ushered in the dawn. It is expected that more real estate companies with good credit are expected to return to overseas bond issuance in the future.
Specifically, in January 2023, the total non-bank financing of real estate companies was 50.85 billion yuan, a year-on-year decrease of 33.1% and a month-on-month decrease of 27.0%. The industry average interest rate was 4.32%, a year-on-year increase of 0.41 percentage points and a month-on-month increase of 0.23 percentage points. From the perspective of financing structure, the credit bond financing of the real estate industry was 29.72 billion yuan, basically flat year-on-year, down 27.6% from the previous month; overseas bond issuance was 6.73 billion yuan, down 21.2% from the previous year; trust financing was 1.56 billion yuan, down 82.2% from the same period last year, and 81.9% from the previous month. %; ABS financing was 12.84 billion yuan, a year-on-year decrease of 55.5% and a month-on-month decrease of 36.0%.
It is worth mentioning that after five consecutive months of suspension of overseas bonds, the dawn finally ushered in in January this year, and many companies have successfully issued overseas bonds. Liu Shui, director of corporate research at the China Index Research Institute, believes that although the overseas debt of real estate companies has been affected by the previous market, the top central state-owned enterprises have once again opened up overseas financing channels with their good credit, laying the foundation for the industry to resume issuing overseas bonds. There may be more in the future. Many real estate companies with good credit have regained the recognition of investors and returned to overseas bond issuance.
At the same time, the overseas debts of many distressed real estate companies have recently been reorganized as a whole, which provides a reference sample for the resolution and clearance of existing debts, and is also conducive to the gradual restoration of overseas financing channels. Among them, China Fortune Land Development disclosed on February 3 that the US dollar bonds issued overseas by the subsidiary (currently with a total face value of 4.96 billion US dollars) have been reorganized by agreement and arrangement, which has been approved by the High Court of England and Wales, and the company’s US dollar bond agreement has officially entered into force. , is currently advancing the implementation of the restructuring plan according to the US dollar bond agreement approved by the British court, and implementing the restructuring and delivery by issuing new bonds and distributing them to creditors. Fantasia Holdings announced on January 13 that the company has made progress in an overseas debt restructuring with a total amount of 4.018 billion US dollars, and has reached an agreement with relevant parties.
On the policy front, on January 10, the central bank and the China Banking and Insurance Regulatory Commission held a symposium on bank credit work, emphasizing the maintenance of stable and orderly real estate financing and the implementation of plans to improve the balance sheets of high-quality real estate companies. Since then, many departments have also emphasized that it is necessary to promote the normal circulation of finance and real estate, and implement the “16 financial regulations”. On January 11, the list of the first batch of high-quality real estate companies to improve their balance sheets was released, including Longfor Group, Country Garden Group, Seazen Holdings, Sino-Ocean Group, Gemdale Group, Midea Real Estate and other companies. High-quality real estate companies and white-listed companies ushered in financing windows.
Liu Shui said that on the whole, bond issuance in January made full use of favorable policies and made new breakthroughs based on the continuation of the good momentum in December last year. With the end of the Spring Festival holiday, with the help of policies, the scale of financing is expected to pick up further. At the same time, under the continuous encouragement of policies, credit bond issuers have shown obvious diversification characteristics. In addition to central state-owned enterprises and private enterprises that have already issued credit-enhancing bonds, some private real estate enterprises have also newly joined the ranks of issuance, and real estate enterprises in danger have also successfully issued, and all of them have received irrevocable joint and several liability guarantees from China Debt Increase. The “Second Arrow” policy is not only quickly implemented, but also the scope of benefits is rapidly expanding. As long as there is a reasonable financing demand, safe and risky real estate companies have the opportunity to get support.
In the secondary market, CRIC Research Center analyzed data showing that real estate-related stocks performed relatively well in January, and 74% of A-share real estate stocks rose throughout the month. In terms of individual stocks, Binjiang Group had a relatively large increase that month. The company’s stock price ushered in a sharp rise in early January. It continued to fluctuate from the 6th until the end of the month, and finally rose by 20.39% for the whole month, becoming the real estate company with the largest increase in A shares that month. The proportion of real estate stocks whose H shares rose throughout the month also reached 52%. Among them, the monthly increase of Yuexiu Services reached 42.6%, which is the real estate related stock with the largest increase in H shares. In addition to Yuexiu Service, the stock prices of property companies such as China Overseas Property and Binjiang Service also rose relatively high throughout the month.
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