Reporter Wang Lixin trainee reporter Chen Xiao
Following the Longfor Group’s 700 million yuan “domestic guarantee for foreign loans” support from the Bank of China, it was recently reported that the Industrial and Commercial Bank of China also planned to provide Country Garden with an “domestic guarantee for foreign loans”. The loan scale was initially set at 300 million U.S. dollars. Finally settled.
Many people in the industry predict that there will be leading private real estate companies that will receive support from "domestic guarantees and foreign loans" one after another, and the first to usher in progress may be demonstration real estate companies.
"The company is currently in communication, and the implementation depends on further progress." A relevant person from Midea Real Estate told the "Securities Daily" reporter.
In addition, the relevant persons in charge of some leading real estate companies also told the "Securities Daily" reporter that there is no relevant news yet, but the company is paying close attention to the policy.
It is not difficult to see that the financing channels of real estate enterprises are gradually expanding, from the initial credit support, bond financing support, and then to equity financing support, gradually deepening and widening the scope.
In addition, from meeting the diverse domestic financing needs of real estate companies to extending to revitalizing overseas financing channels, overseas financing for real estate companies is being unblocked.
Just as a person from a real estate company told the "Securities Daily" reporter: "The credit enhancement provided by the 'domestic guarantee and foreign loan' shows the government's support for private real estate companies, and also reflects the determination to resolve the risks of real estate companies. The credit environment in the offshore market will restore and boost confidence in the overseas market.”
Improve the overseas financing environment
"Domestic guarantees and foreign loans" means that domestic banks provide guarantees for domestic enterprises' affiliated enterprises registered overseas or shareholding investment enterprises, and overseas banks issue corresponding loans to overseas investment enterprises.
Which real estate companies will meet the conditions of "domestic guarantee and foreign loan" and be the first to benefit?
Many people in the industry believe that real estate companies that are not in danger and have a good credit situation will have a chance, and the probability of being approved by low credit and risky real estate companies is not high.
"High-quality real estate companies are more likely to obtain financing through the channel of 'domestic guarantees and foreign loans'. For example, those real estate companies with stable cash flow, low debt pressure, and strong operating resilience." Xiao Yunxiang, a senior analyst at Tongce Research Institute, told the Securities Daily "The reporter said that at present, the audit should generally include various debts, assets, operations, or sufficient mortgage and pledge conditions. However, the domestic real estate market is still in a downturn. Neither is very ideal, so there are not many real estate companies that meet the conditions.
"From the point of view of the collateral situation, (domestic guarantees and foreign loans) will have a certain scale, but it will be difficult to implement them widely." Huang Lichong, president of Huisheng International Investment, told the "Securities Daily" reporter that the main reason is that real estate companies need to spend a lot of money. Cash or high-quality assets are mortgaged in domestic banks to obtain corresponding loans, but some assets have been used for financing, and many banks may not accept similar property mortgages, so it is difficult for "domestic guarantees and foreign loans" to make breakthroughs in scale.
However, from the bank's point of view, at present, real estate companies default on overseas debts from time to time, and the risk exposure brought by default to banks should not be underestimated.
"Internal Guarantees and Foreign Loans" can allow qualified real estate companies to "borrow new ones to repay old ones" and reduce debt repayment pressure. While helping real estate companies restore liquidity, it can also reduce bank risk losses, thereby maintaining economic and financial stability with practical actions big picture.
"At present, about 40 real estate companies have defaulted on their debts, and more than 100 are still out of danger." Liu Shui, research director of the Enterprise Business Department of the China Finger Research Institute, said that the "domestic guarantee and foreign loan" policy can prevent the risk of debt default from continuing to expand.
But at present, only a few enterprises have achieved financing with the support of "domestic guarantees and foreign loans", and it is difficult for enterprises that have been in danger to benefit.
For real estate companies that have already been in danger, there is a high probability that they will not implement loans through "domestic guarantees and foreign loans".
An insider of a real estate company told the "Securities Daily" reporter bluntly, first of all, the scale of overseas debt repayment of a real estate company in danger is relatively large, and it is either planning to extend the overall overseas debt, or negotiating an offer exchange for a single or several US dollar debts Or the issue of extension, the premise is not repayment of overseas debts.
If the "domestic guarantee and foreign loan" is started at this time, even if the final breakthrough is successful, it will be difficult to explain to all creditors, which will not be conducive to the advancement of the overall debt restructuring plan.
Secondly, the implementation of "domestic guarantees for foreign loans" requires the provision of asset mortgages. For some real estate companies, it may not be easy to provide high-quality unfinanced assets for mortgage loans.
Alleviate the pressure of overseas debt repayment
In fact, the overseas market, as an important channel for real estate companies to finance, once accounted for more than 30% of the financing amount. However, since last year, many real estate companies have experienced overseas debt extensions and defaults, and overseas credit bond financing has gradually tended to freeze.
Huang Lichong told reporters that due to the constraints of the bond issuer, under the current conditions, overseas investors can take very limited actions against default. Even if the real estate company is liquidated, the repayment received by investors may not be as expected. As a way of credit enhancement, or a tool for regulators to repair the credit of Chinese-funded real estate companies.
As early as November 21, the People's Bank of China and the China Banking and Insurance Regulatory Commission jointly held a national commercial bank credit work symposium. Pan Gongsheng, deputy governor of the central bank, once stated that it is necessary to support overseas financing of real estate companies through cross-border credit enhancement of domestic guarantee and foreign loan business, " Overseas branches and sub-branches of commercial banks should increase their support for high-quality real estate enterprises’ domestic guarantee and offshore loan business, and accelerate the implementation of projects.”
Not long after the meeting was held, Bank of China Chongqing Branch issued a RMB financing guarantee letter for Longfor Group, and Bank of China Hong Kong used the RMB guarantee letter as a guarantee to provide loan financing for Longfor Group’s overseas enterprises. The loan was withdrawn on December 9. , to meet the liquidity needs of Longfor Group.
In this regard, Xiao Yunxiang said, "Since the second half of last year, rating agencies have downgraded the credit ratings of Chinese real estate companies one after another. Capital real estate companies do credit endorsement to avoid 'accidental injury' to high-quality real estate companies, and it is beneficial for uninsured companies to obtain financing through overseas markets."
From the perspective of the industry, although the bailout effect of "domestic guarantees and foreign loans" for Chinese-funded real estate companies is limited, opening the door to overseas financing will help some real estate companies survive the peak debt repayment period in the first quarter of next year.
According to the monitoring data of the China Index Research Institute, in the first quarter of 2023, the scale of outstanding overseas debts of real estate companies exceeded 100 billion yuan, and the debt repayment pressure was relatively high.
In addition, from the perspective of debt maturity, according to the statistics of Zheshang Securities, the amount of domestic real estate bonds due to repay in 2023 will be 358.3 billion yuan, a total of 424, and the maturity amount of Chinese-funded US dollar real estate bonds will be 58 billion US dollars, a total of 210 .
Among them, January and April next year will be the peak of Chinese dollar real estate debt repayment, with the monthly maturities of US$9.8 billion and US$7.8 billion respectively.
Yan Yuejin, Research Director of the Think Tank Center of E-House Research Institute, told the "Securities Daily" reporter that it is difficult to solve the problem of real estate companies repaying US dollar debts on a large scale with "domestic guarantees and foreign loans", and it is difficult to repair the credit of real estate companies that have been in danger.
A real change in the confidence of global investors in the real estate industry still requires an overall improvement in the sales side, and only then will companies have the ability to generate blood.
(Securities Daily)
