More and more Chinese developers are looking to issue domestic bonds

Surveillance cameras are seen near a real estate project under construction in Shenzhen, Guangdong province, China on November 8, 2021. REUTERS / David Kirton

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SHANGHAI, Dec. 2 (Reuters) – Three Chinese developers, including the main operating platforms of Country Garden Holdings Co and Longfor Group Holdings Ltd, plan to sell bonds in China to raise a total of 18 billion yuan (2 , $ 83 billion), the official registration system showed on Wednesday evening proof that Beijing is slightly easing liquidity pressures on the cash-strapped sector.

China tightened funding restrictions on the real estate sector earlier this year, exacerbating financial woes for indebted developer China Evergrande Group (3333.HK) and triggering industry-wide liquidity stress that some say could destabilize the Chinese economy.

In recent weeks, there have been signs that some funding channels are relaxed slightly for developers.

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According to the Chinese Interbank Debt Market Ranking System, Country Garden Real Estate Group, controlled by Country Garden Holdings (2007.HK), plans to issue medium-term bonds worth 5 billion yuan.

Chongqing Longhu Enterprise Development Co, the main platform of the Longfor group (0960.HK), plans to issue 3 billion yuan in debt.

Meanwhile, state-owned developer China Overseas Enterprise Development Group Co aims to issue three debt tranches totaling 10 billion yuan, according to the registration file.

There have been other signs of life in the domestic bond market for developers. Corporate bonds issued by real estate companies nearly tripled in November from the previous month, to 37.1 billion yuan, the China Securities Journal reported on Wednesday.

There are also signs of easing of marginal lending. Last month, sources told Reuters that financial regulators had asked some Chinese banks to grant more loans to real estate companies for project development. Read more

But the Chinese authorities have given no signal that they will relax the “three red lines” – the financial requirements that the central bank introduced last year and that developers must meet to obtain new bank loans. Analysts said Beijing will continue its deleveraging campaign against developers despite recent policy adjustments.

($ 1 = 6.3673 yuan Chinese renminbi)

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Report from the Shanghai press room; Editing by David Gregorio

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