Although the domestic and foreign bond issuance of real estate enterprises decreased by 70% year-on-year in January this year, the financing environment of real estate enterprises is still improving.
Just after the Spring Festival, many real estate enterprises started the intensive bond issuance mode. According to the incomplete statistics of the reporter of the daily economic news, as of February 18, 2022, there have been green city China, CCCC, Poly Real estate, Jinke Property Group Co.Ltd(000656) , Jinjiang urban investment, Nanning urban investment, Yufu holdings, Yuexiu group, Bozhou urban construction, Chongqing Southern new town industry, country garden, Jinan urban construction, HUAFA group, Shenzhen Metro Group, Sichuan development 16 real estate enterprises, including Guangzhou Development Zone holding group, issued bonds intensively, raising a total of 31.275 billion yuan.
“With the marginal relaxation of the credit side policy, the reasonable capital demand of the real estate market is being met.” Yan Yuejin, research director of the think tank center of E-House Research Institute, told the reporter of daily economic news that it can also be found from the real estate enterprises issuing bonds that most of them are state-owned enterprises, central enterprises and local platforms with relatively stable development. These enterprises usually have local and state-owned assets endorsement, often have high credit rating and are easy to obtain bond issuance applications. After the marginal of credit is relaxed, it is very likely to gradually overflow to private enterprises in the future.
16 real estate enterprises issued bonds intensively, with a total amount of more than 30 billion yuan
In January before the Spring Festival, according to the statistics of Shell Research Institute, the domestic and foreign bond financing of real estate enterprises totaled about 48.1 billion yuan, a sharp year-on-year decrease of 70%. The wave of bond issuance by real estate enterprises after the Spring Festival can be seen as a positive signal from the government at the end of last year and a significant improvement in the implementation level of China’s moderate regulation of the financing environment.
From the perspective of the interest rate of bonds issued by real estate enterprises, it is generally 2.7% – 8%. However, the bond issuing interest rates of state-owned enterprises and central enterprises are relatively low. For example, the interest rates of real estate enterprises such as CCCC and poly are lower than 4%, while the nominal interest rates of private enterprises are higher.
Among them, Poly Real estate has the lowest interest rate. On February 15, Poly Real Estate issued the first phase of corporate bonds in 2022, raising no more than 2 billion yuan, with a minimum interest rate of 2.7%.
In comparison, on February 16, Jinke real estate also issued the first phase of corporate bonds in 2022, with an issuance scale of no more than 1.5 billion yuan and a term of four years, and finally determined the coupon rate of 8%
data source: Shell Research Institute
From the purpose of issuing corporate bonds in this wave of real estate enterprises, “borrowing new to repay old” is the main purpose. For example, the 1.5 billion yuan corporate bonds issued by Jinke this time raised funds for the resale principal and interest of 20 Jinke 01; 3 billion yuan of corporate bonds issued by Cccg Real Estate Corporation Limited(000736) and the raised funds are used to repay the matured corporate bonds; The 1 billion yuan corporate bonds issued by power construction real estate are intended to be used to repay the resale money of “19 power construction bonds”. Some real estate enterprises also issue bonds for other purposes, such as supplementary working capital, project construction, acquisition of real estate projects, etc.
The reporter of “daily economic news” noted that since the Spring Festival holiday, not only the speed of bond issuance by real estate enterprises has increased, but also the examination and approval of corporate bond issuance by Shanghai Stock Exchange has been accelerated at the same time.
According to the information disclosed by the “corporate bond project information platform” of Shanghai Stock Exchange, the bond issuance progress of more than 20 real estate enterprises has been changed to “accepted” or “feedback” in recent days, which is one step closer to the successful bond issuance.
On February 15 alone, the progress of corporate bond projects of nearly 10 real estate development enterprises was updated to “feedback”, including Ziyang urban construction, Wenzhou urban construction, Qingdao Shiyuan group, Meishan development, Heze urban investment, Taiyuan Longcheng development, etc. Previously, on February 14, more than 10 real estate development enterprises, including Xiamen housing construction group, Chengdu high tech investment group, Wuxi Taihu new town development, Shanghai Zhangjiang group, Guangzhou urban construction, Shangrao innovative development industry investment group, also welcomed another progress update after the acceptance of bond financing applications. The current project progress is “feedback”.
In addition, from the characteristics of bond issuing enterprises, it can also be clearly found that the protagonists of this wave of bond issuing tide are still state-owned enterprises, central enterprises and local urban construction platforms with state-owned assets background. There are relatively few private enterprises. After the year, only a few private enterprises such as country garden and Jinke issued corporate bonds
data source: Shell Research Institute
The financing end continues to recover, and may gradually overflow to private enterprises in the future
For this wave of intensive bond issuance of real estate enterprises after the year, market participants believe that there are not only policy care for the financing end of real estate enterprises, but also the actual demand of “moving forward” based on infrastructure investment at the macro level.
\u3000\u3000 “With the marginal relaxation of the credit side policy, the reasonable capital demand of the real estate market is being met. From the real estate enterprises issuing bonds, it can also be found that most of them are state-owned enterprises, central enterprises and local platforms with relatively stable development. These enterprises usually have local and state-owned assets endorsement, often have high credit rating and are easy to obtain bond issuance applications. After the marginal relaxation of the credit side, they are likely to gradually develop in the future Spillover to private enterprises. “
Yan Yuejin told the reporter of the daily economic news that the current monetary policy proposed to stabilize macroeconomic growth is full force, accurate force and forward force, which is a positive signal for many local platforms. For those real estate enterprises with relatively stable development, the capital will also become more abundant. Some real estate enterprises with high debt pressure have weaker relative freedom, and their advantages are weaker when such financing ends are relaxed.
“At present, the state does have many preferential policies for the financing end of real estate enterprises. For example, M & A loans are no longer included in the relevant indicators of the ‘three red lines’, as well as infrastructure bonds issued by local urban investment enterprises and corporate bonds of head enterprises, which are relatively easy to pass.” In an interview with reporters, an executive of a head real estate enterprise said that in order to solve the risks of enterprises in danger, the local government also began to build a platform to start docking, in order to make the stable development of the real estate industry and realize a virtuous circle.
However, the above-mentioned executives of real estate enterprises also stressed that “if we want to say that the loose policy on the financing side has an impact on enterprises, it is more friendly to the more stable real estate enterprises, and may not have a great impact on some small and medium-sized private real estate enterprises. For those real estate enterprises with high debt risk, their financing pressure may not be reduced.”
For the current overall development of the real estate industry, Shenhong Securities pointed out in the research report that at present, for the whole real estate industry, good is more than bad, but the differentiation between enterprises still exists. Specifically, with the introduction of national opinions on the supervision of pre-sale funds, real estate enterprises with real capital problems are expected to remain the key object of policy supervision. For high-quality real estate enterprises, the overall friendliness of regulatory policies is expected to be improved.
Shenhong securities predicts that in 2022, the real estate industry will form a policy trend of “upper pressure and lower support”. With steady economic growth and no systemic risk as the bottom line, the industry fundamentals will be gradually improved slightly, while avoiding the old road of using real estate to stimulate short-term economic development due to excessive force, and the policy will continue to maintain a moderate and good direction.
