More Chinese automakers to issue asset-backed securities amid Evergrande crisis
Some of China’s top real estate developers are planning to issue short-term Asset Backed Securities (ABS), a further sign that regulators are slightly widening financial channels for developers amid the Evergrande debt crisis.
China Evergrande, struggling with debts of more than $ 300 billion, said on Friday that there was “no guarantee” that it would have enough funds to repay the debt, prompting the country’s main financial regulators to calm the market.
Regulators have said any fallout is controllable and developers’ normal funding needs will be met, but the industry faces another year of tight funding conditions and refinancing risks, Moody’s said in a note last week. .
Country Garden, the country’s leading real estate developer, said on Sunday that the company is considering applying for the issuance of securities based on short-term supply chain assets.
“As an innovative financing tool, ABS supply chain products can support the financing of upstream suppliers and alleviate financing difficulties for small and medium-sized enterprises,” the company said in a statement on its account. official WeChat.
He also pledged to control the risks of the business through prudent operations, the statement said.
Four other developers, including Huafa Industrial and Greentown China, have received regulatory comments on their plans to issue ABS totaling nearly 16 billion yuan ($ 2.51 billion), the Shanghai Stock Exchange reported on December 3. .
The Securities Times reported that China Vanke also plans to issue supply chain ABS worth 777 million yuan in the short term.
“The restrictions on the financing of domestic real estate bonds have eased and the amount of bond issues in November is about 3 times that of October,” CICC analysts wrote in a note, adding that bond financing was picking up. in an orderly fashion.
China’s real estate market, which accounts for a quarter of gross domestic product by some measures, has cooled sharply since May with sentiment reeling from intensifying liquidity stress that has engulfed some of the country’s most indebted developers.
Analysts don’t think Beijing is easing its campaign to curb developers with high debt levels much, but they do expect some policy adjustments to ensure home prices and sales don’t fall too quickly.
Regulators have said they will support private companies, especially those affected by recent debt problems, to raise funds “properly,” the Xinhua News Agency reported on Sunday, citing a regulator official. securities.