The scale of real estate financing shrinks more than expected

  Not long ago, real estate companies such as China Fortune Land Development and Blu-ray Development were exposed to financing and debt problems.

In May, real estate companies entered the traditional bond financing "small month." Real estate companies generally showed the characteristics of a decline in coupon rates and extended bond issuance periods in bond financing.

With the steady implementation of the "housing to live without speculation" policy and the further strengthening of financing supervision, the overall financing scale of real estate companies is shrinking more than expected.

  The overall financing scale decreased by 30% month-on-month in May

  Compared with the data of previous years, the overall data on debt issuance by real estate companies this year does not seem to be optimistic.

  Industry insiders believe that the "three red lines" have restricted the financing impulse of real estate companies to a certain extent, prompting real estate companies to change their previous high-leverage development model, and take "strong collection" and "control investment" as the new development of enterprises. Key words.

"The company has launched a debt reduction plan to reduce leverage." The management of Beijing Capital Land pointed out at the performance meeting this year that the new financing is used in principle to repay the existing debt, and the debt scale will only decrease.

  According to data from the Shell Research Institute, from January to May this year, domestic and foreign bond financing of real estate enterprises totaled about 462.4 billion yuan, a year-on-year decrease of 18%, reaching the lowest point in the past three years.

Among them, a total of 52 domestic and foreign bond financings were issued in a single month in May, with the issuance scale equivalent to approximately 64.7 billion yuan, a decrease of 30.9% from the previous month and an increase of 4.9% from the same period last year.

  From the perspective of financing structure, there were 15 and 37 bond issuances for overseas and domestic financing in May, with financing scales of RMB 25.4 billion and RMB 39.3 billion, respectively.

Pan Hao, a senior analyst at Shell Research, said: “Although domestic bonds still maintained the dominant position in the bond market during the year, their proportion declined significantly.”

  “The domestic debt market has been affected by a large number of ABS (supply chain) project termination events, many of which involve housing projects.” In recent years, financing channels such as bank credit, entrusted loans, and overseas debt have been gradually tightened, making the supply chain Financing has gradually become the main way for real estate companies to supplement funding sources, especially after the "three red lines", many real estate companies have tried to help companies reduce their interest-bearing debt leverage through this method.

  According to Crane's statistics, since 2018, the issuance of ABS/ABN in the real estate supply chain has shown a blowout growth, and the issuance volume in 2020 will reach 275.3 billion yuan.

According to data from the Shanghai Stock Exchange, the supply chain product quota recently applied by real estate companies is up to 2 billion yuan.

Among them, the amount of supply chain asset support plans recently passed by Country Garden, New Town Holdings, Fantasia, Longjitaihe, etc. are all 2 billion yuan.

  Industry insiders predict that trends such as lowering the filing quota for supply chain standard products will continue in the short term, forcing real estate companies to deleverage and reduce industry risks.

Pan Hao believes that with the further strengthening of the regulatory trend, the approval time for debt issuance by real estate companies will be extended, which may affect the pace of domestic debt issuance by real estate companies in the later period.

"Overseas, the scale of short-term bond issuance may pick up slightly, but the overall uncertainty and volatility remain."

  Many real estate companies' financing debt problems are highlighted

  The reporter learned that many real estate companies have also encountered debt-related crises recently.

Not long ago, the development of Blu-ray development of TOP100 domestic real estate companies suffered a "double kill of stocks and debts" for several consecutive days, and their bond prices continued to plummet, and domestic and foreign rating agencies successively lowered the ratings of Blu-ray development entities and debts, further increasing the pressure on refinancing.

  Regarding the reasons for the downgrade, multiple rating agencies stated that Blu-ray Development’s existing non-bank loans accounted for a high proportion of total debt, and the solvency of non-bank loans was weak.

It is predicted that in the second half of this year, Blu-ray Development may face about 8.2 billion yuan of non-bank financing and 5.061 billion yuan of domestic bonds with rights to maturity, cash flow is tight, and bond repayment pressure during the year will be great.

  Among them, the rating agency Moody's lowered its rating on Blu-ray development twice in May.

In this regard, its senior analysts said that the downgrade reflects the increased refinancing risk of Blu-ray development in the next 12-18 months.

  It is reported that on May 31, Blu-ray Development announced that: “Because the major shareholder Blu-ray Group holds Blu-ray Development stocks for pledge financing, financial institutions will compulsorily dispose of the relevant pledged stocks in accordance with the agreement.” Then the reporter inquired. It was found that after the stock price of Blu-ray Development fell more than 12% in the first three trading days of June, it closed at 3.39 yuan per share on June 4, a record low since 2008, with a total market value of only 10.3 billion yuan.

  According to the financial report data of Blu-ray Development in 2020, as of the end of the reporting period, its financial liabilities exceeded 100 billion yuan, reaching 116.226 billion yuan, and the short-term debt repayment amount reached 70 billion yuan.

The industry believes that the reasons for the stock debt plummet of Blu-ray Development are closely related to the exposed debt problems.

  Similar to the development of Blu-ray, in the face of a debt crisis, China Fortune Land Development had to sell equity in its projects to save itself.

On May 17, Baoye Group announced that Hubei Jiangong Real Estate, a wholly-owned subsidiary of the company, intends to acquire 51% equity of Wuhan Yuzhu Real Estate Development Co., Ltd. from Langfang Jingyu Real Estate, a subsidiary of China Fortune Land Development, for a consideration of approximately 203 million yuan.

It is understood that after the completion of the acquisition agreement, Hubei Construction Engineering Real Estate will hold 100% equity of the target company.

  Prior to this, China Fortune Land Development had sold the Nanhu project in Jiaxing to Sunac, and subsequently sold the Qinhuai site in Nanjing to Jinmao and Midea.

However, the speed at which it sells assets obviously cannot make up for its huge debt pressure.

According to an announcement issued by China Fortune Land Development on May 12, as of now, the company has failed to repay the principal and interest of its debt as scheduled, and the total amount of debt still exceeds RMB 50 billion, and the debt restructuring plan has not made new progress.

  In addition to the prominent debt problems of Blu-ray Development and China Fortune Land Development, Tahoe recently received an inquiry letter from the Shenzhen Stock Exchange regarding its deep debt crisis.

Data shows that as of April 30 this year, Tahoe has matured and unpaid loans amounting to 43.155 billion, and Tahoe’s debt-to-asset ratio rose from 84.95% at the end of 2019 to 90.75% at the end of last year; short-term borrowings, interest payable, and one The ending balance of non-current liabilities and other current liabilities due during the year totaled 39.464 billion yuan.

  It is reported that on May 27, Cinda Assets issued an announcement on the disposal of Tahoe's projects. It intends to conduct a public auction of the claims of the Shishi Tahoe Plaza project of Tahoe Group. The total amount of claims for the project is 1.058 billion yuan, of which the balance of debt restructuring It is 840 million yuan.

This is also the first creditor's rights project that has been publicly auctioned since the outbreak of the debt problem.


  Liu Shui, Deputy Director, Enterprise Business Department, Zhongzhi Research Institute

  The "Three Red Lines" The Impact Appears

  "Green Finance" broke out

  Since last year, the real estate financing environment has continued to tighten. In the context of insisting on the policy of “no real estate speculation” and the introduction of the “three red lines”, financial supervision has continued to tighten.

  According to the incomplete financial report data of listed real estate companies in 2020, the asset-liability ratios of Shanghai, Shenzhen and mainland Hong Kong listed real estate companies after excluding advance receipts are 63.5% and 70.6%, respectively, down 0.1 and 0.7 percentage points from the previous year; net; The debt ratio was 75.6% and 81.9% respectively, a decrease of 9.1 and 26.8 percentage points from the previous year.

The short-term cash debts of real estate companies listed in Shanghai, Shenzhen and Mainland China in Hong Kong increased by 0.08, 0.32 to 1.37, 1.54 respectively compared with the previous year.

"The decline in the debt level of listed real estate companies and the increase in short-term debt servicing capabilities prove that the impact of the'three red lines' is emerging." Liu Shui said.

  "Traditional financing restrictions have led to the emergence of supply chain ABS financing." Liu Shui said that according to the monitoring of the Zhongzhi Research Institute, in the first quarter of this year, a total of 160 asset securitization products in the real estate industry were issued, with a total issuance size of 97.597 billion, a year-on-year increase of 65.14%.

Among them, there are 107 supply chain ABS products, with a scale of 57.533 billion yuan, accounting for 59.0%.

"In response to this phenomenon, the Fund Industry Association recently suspended the registration of real estate supply chain products by fund subsidiaries, and further strengthened real estate financial supervision and risk prevention efforts." Liu Shui said.

  Liu Shui analyzed that under the influence of the financing environment, some real estate companies with high leverage and poor performance may have cash flow problems.

In addition, the demand for real estate is strictly controlled, and sales collection is blocked. In the future, the default of real estate enterprises' debts may increase, and mergers and acquisitions between enterprises may become more frequent.

  "At present, real estate companies have adopted measures such as increasing promotion efforts, accelerating the speed of sales collection, and slowing down the pace of land acquisition to ensure the relative abundance of cash flow." According to the monitoring of the Central Committee of the Chinese Academy of Sciences, as of the end of May this year, real estate companies The total amount of overseas green bond financing reached 27.838 billion yuan, while the total amount of green bond financing in overseas bonds last year was only 16.875 billion yuan.

  Liu Shui pointed out that the average financing cost of overseas green bonds is low, at 6.59%; and the use of funds is flexible and market recognition is high.

"50% of the green bond quota can be used to repay mature debts and supplement operating funds, and the use of raised funds is more flexible, allowing all to be used to repay the company's future debts." He believes that real estate "green finance" may be used in the future. Become a new financing channel for real estate enterprises.

Text/Zhang Xinyu