China News Agency, Beijing, January 18 (Reporter Zhou Rui) Jin Xiandong, director of the Policy Research Office of China's National Development and Reform Commission, said on the 18th that in 2021, individual high-leverage real estate companies will default on overseas debt due to their own business problems, which will lead to the real estate market in the Chinese overseas debt market. The short-term panic in the sector is a self-adjustment of the market and will not affect the overall function of the Chinese-funded overseas bond market.
In the long run, the Chinese overseas bond market will further mature and improve.
Jin Xiandong said this at a press conference held by the National Development and Reform Commission on the same day.
Jin Xiandong revealed that in 2021, a total of 335 Chinese-funded enterprises will issue 592 medium and long-term bonds overseas, with a total amount of US$195.85 billion.
Overall, Chinese-funded overseas bond issuers are becoming more and more diverse, the proportion of high-quality corporate issuance scale has increased, comprehensive financing costs have dropped significantly, the effect of serving the real economy has become more obvious, and the role of supporting major national strategies and key areas has become more prominent.
First, the proportion of the issuance scale of high-quality enterprises has increased, and many leading enterprises in sub-sectors have explored overseas financing channels.
In 2021, the issuance of investment-grade bonds will account for 63.3% of the total issuance, an increase of 4.5 percentage points from the previous year.
A number of leading companies in sub-sectors have issued bonds in overseas markets for the first time, which have been actively subscribed by overseas investors, further enriching the composition of issuers of Chinese-funded companies.
Second, the cost of financing has dropped significantly, and the effect of serving the real economy has been remarkable.
In the context of the volatile and upward US dollar benchmark interest rate in the third quarter of 2021, Chinese-funded enterprises can still grasp a good issuance window and reduce financing costs.
According to open market statistics, the weighted average cost of overseas medium and long-term bonds for Chinese-funded enterprises in 2021 will be 3.76%, a decrease of 67 basis points from the previous year, which strongly supports the development of the real economy.
The third is the substantial growth of green bonds.
According to open market statistics, in 2021, Chinese-funded enterprises will issue 58 medium and long-term green bonds overseas, with an issuance amount of US$21.47 billion, a significant increase of 162.8% over the previous year.
There were 12 sustainable development bonds with an amount of US$5.91 billion, 12 times that of the previous year.
Sustainability-linked bonds and transition bonds are also emerging.
At the same time, the issuers are more diverse, covering financial institutions, central enterprises, local state-owned enterprises, real estate enterprises and other sectors.
Jin Xiandong said that in the next step, the National Development and Reform Commission will continue to encourage and support high-quality enterprises in the rational use of medium and long-term foreign debt in key areas such as technological innovation, advanced manufacturing, green development, and new infrastructure, actively guide enterprises to optimize the interest rate and term structure of foreign debt, and resolutely curb new Increase the hidden debt of local governments and effectively prevent foreign debt risks.
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