Following China Eastern Asset Management Co., Ltd. (hereinafter referred to as “China Eastern”), another national financial asset management company (AMC) joined the list of issuing bonds to raise funds and defuse risks in the real estate industry.
On March 13, China Greatwall Technology Group Co.Ltd(000066) Asset Management Co., Ltd. (hereinafter referred to as ” China Greatwall Technology Group Co.Ltd(000066) assets”) was approved to publicly issue 10 billion yuan of financial bonds in the national inter-bank bond market, and the raised funds will be mainly used for risk mitigation in the real estate industry.
So far, the financing channels of real estate mergers and acquisitions have exceeded 150 billion yuan.
Insiders believe that the issuance of M & A financing bonds of state-owned asset management companies provides new funds and opportunities for the real estate industry. From the perspective of real estate enterprises, we should seize the policy window period, comply with the policy guidance, and improve the industry liquidity through mergers and acquisitions.
two AMCs enter the “blood transfusion” successively
On March 13, China Greatwall Technology Group Co.Ltd(000066) assets was approved to publicly issue 10 billion yuan of financial bonds in the national inter-bank bond market.
China Greatwall Technology Group Co.Ltd(000066) assets said that the raised funds will be mainly used for risk resolution and disposal of high-quality projects of key real estate enterprises, rescue of the real estate industry and other related non-performing assets and repayment of maturing stock bonds.
This is another AMC that has recently joined the list of issuing bonds to raise funds to defuse risks in the real estate industry after China Oriental.
On February 18, China Eastern’s application to publicly issue financial bonds of no more than 10 billion yuan in the national inter-bank bond market was approved. The raised funds were mainly used for risk resolution and disposal of high-quality projects of key real estate enterprises, and relief of non-performing assets in the real estate industry and resolution of real estate financial risks.
China Eastern is the first AMC approved to issue financial bonds for real estate rescue after the financial regulatory authorities convened a national AMC meeting at the end of January to study AMC’s participation in financial services such as mergers and acquisitions of risky real estate enterprises.
On January 26, the reporter of the securities times verified from various parties that the financial supervision department recently convened several AMCs to study AMC’s participation in asset disposal, Project M & A and related financial intermediary services of venture real estate enterprises in accordance with the principles of marketization and legalization.
Chen Xing, deputy research director of the enterprise business department of China Index Research Institute, believes that the debt of the two asset management companies has landed soon, indicating that the current targeted loose financing policy has landed very timely and quickly.
Chen Xing said that as an independent third-party financial institution, asset management companies have rich experience in the disposal of risky assets and are supported by financing policies. They have stronger advantages in terms of capital adequacy and professionalism. Their participation is expected to speed up the disposal of current enterprise projects at risk and promote risk resolution and market clearing. At the same time, the state-owned assets management company undertakes three key tasks of “serving the real economy, preventing and resolving financial risks and deepening financial reform”. It is separated from the micro perspective of enterprises and plays the function of counter cyclical mediation from the height of industry development, which will play an important role in the long-term and stable operation of the real estate industry. On the whole, the issuance of M & A financing bonds of state-owned asset management companies provides new funds and opportunities for the real estate industry.
all channels of real estate M & A financing has exceeded 150 billion
In addition to AMC’s participation in this round of rescue of real estate enterprises, in fact, banks have long issued M & a themed bonds of real estate enterprises in the open market to raise funds to support real estate enterprises to resolve risks. At present, a number of banks, including Shanghai Pudong Development Bank Co.Ltd(600000) , Guangdong Development Bank, Ping An Bank Co.Ltd(000001) , Industrial Bank Co.Ltd(601166) and others, have announced plans to issue M & A bonds of real estate enterprises ranging from 5 billion to 10 billion.
On February 17, Industrial Bank Co.Ltd(601166) plans to issue no less than 10 billion yuan of real estate M & a themed bonds, and the raised funds are specially used for the investment of real estate M & A loans Industrial Bank Co.Ltd(601166) said that recently, it has successively contacted a number of high-quality real estate enterprises in the market to investigate the principles, standards, processes and supporting policies of the risk disposal projects of key real estate enterprises through M & A loans, M & A bills, M & a funds, M & a financial consultants, etc, Focus on supporting high-quality real estate enterprises to merge and acquire high-quality real estate projects that are in danger and difficult.
Since this year, not only many banks have issued M & a themed bonds, but also many banks have signed strategic cooperation agreements with real estate enterprises to provide M & A financing lines for real estate enterprises. Among them, the largest one is the 20 billion yuan M & A financing line China Merchants Bank Co.Ltd(600036) granted to China Resources Land on January 26, which is dedicated to the M & a business of China Resources Land, including but not limited to M & A loans, M & a funds, asset securitization and various financing products innovated based on the needs of M & a related business.
With the increasing support of financial policies, real estate enterprises supported by M & A financing also began to appear high-quality private enterprises. On March 3, country garden and China Merchants Bank Co.Ltd(600036) signed a 15 billion yuan strategic cooperation agreement on real estate M & A financing. China Merchants Bank Co.Ltd(600036) will grant country garden a 15 billion yuan M & A financing line, which is dedicated to the real estate M & a business of country garden. The business types include but are not limited to M & A loans, M & a funds, asset securitization and innovative financing products derived from the business needs related to M & A. On March 9, Xuhui also received the 5 billion yuan M & A financing quota granted by Ping An Bank Co.Ltd(000001) grant, which will promote Xuhui to better grasp the M & A opportunities in the market.
According to the statistics of China Index Research Institute, up to now, more than 150 billion yuan of M & A financing has been settled through various channels. Chen Xing said that with the official admission of state-owned asset management companies, it shows that the participants in M & A activities are more diverse.
The multi-body financing support for the acquisition and merger projects of real estate enterprises is the further implementation of the central document at the end of last year.
On December 20, 2021, the central bank and the China Banking and Insurance Regulatory Commission issued the notice on doing a good job in M & a financial services for risk disposal projects of key real estate enterprises, encouraging banks to carry out M & a loan business in a stable and orderly manner, and focusing on supporting high-quality real estate enterprises to merge and acquire high-quality projects of large real estate enterprises in danger and difficulties. At the same time, we will increase support for bond financing, support high-quality real estate enterprises to register and issue debt financing instruments in the inter-bank market, and raise funds for mergers and acquisitions of risk disposal projects of key real estate enterprises.
Chen Xing believes that from the perspective of real estate enterprises, we should seize the policy window period, comply with the policy guidance, and improve the industry liquidity through acquisition and M & A activities: qualified enterprises take the opportunity to explore channels to achieve financing, and accident enterprises dispose of assets to supplement the short board of funds.
Kerui research center also believes that in 2022, the liquidity risk of the industry continues, but at the same time, the acquisition opportunities are also increasing. On the one hand, for enterprises with great debt repayment pressure, it is urgent to reverse the situation with the help of project transfer and asset sale. On the other hand, central enterprises, state-owned enterprises and some high-quality private enterprises will take greater initiative in the M & a market with their own strength and policy support. With the opening of M & A financing channels, the industry’s enthusiasm for M & A has been mobilized. Strengthening the transfer, merger and acquisition at the project level is expected to alleviate the capital pressure of the real estate enterprises in danger, prevent the expansion of risks and speed up the clearing of market pressure.
