Before October, Overseas Financing Is Still Difficult To Fill The Gap.

Due to the tightening of domestic financing channels, the recent housing enterprises are facing the peak of overseas financing. But for enterprises, this seems to be a helpless move.

Central Plains real estate data show that in October this year, housing enterprises have issued nearly $5 billion overseas financing plan, higher than the $3 billion 797 million in September, much higher than the $1 billion 580 million in August. This year, the overseas financing plan of Housing enterprises has reached 57 billion 500 million US dollars, an increase of about 50% over the same period last year.

Since May this year, regulators have strictly managed the financing channels for housing companies. After a series of policies, private equity, trust and other channels have been greatly reduced, and bank loans are also significantly restricted. Affected by this, the recent scale of overseas financing of Housing enterprises has been greatly improved.

Overseas financing has never been the main source of Housing enterprises' capital, and for the moment, the cost of overseas financing is high. Analysts believe that the housing demand for overseas financing is the domestic channel constraints under the helpless move. However, due to the peak period of debt repayment, the pressure of Housing enterprises' capital continues to increase. In the next few days, the sales force will ensure that sales and repayment will continue to be the main strategy for housing companies.

Nearly half of the financing cost is in two figures.

Overseas financing has always been a source of funds for housing companies, mainly used to supplement domestic financing, while hedging exchange rate risks. In the first half of this year, the scale of overseas financing of Housing enterprises once climbed, and then became stable. In September and October, there was a significant increase.

In October 30th alone, housing companies had 5 overseas financing initiatives. Among them, Rong Chong issued a 5 year period of 650 million US dollar preferred note, the interest rate was 7.5%; Xu Hui issued a 5 year period of 400 million US dollar preferred note, the coupon rate 6.45%. The purpose of the two companies issuing bonds is "existing debt refinancing".

Hongyang real estate issued on the same day in 2021, the amount of $100 million senior notes, interest rate reached 13%. Jia also said that it issued a $200 million senior note in 2022, with an interest rate of 11.95%. Yu Zhou intends to issue a 5 year period of 500 million US dollars in preferred notes with an interest rate of 8.375%.

By contrast, the size of domestic financing has declined significantly. Chuan Cai securities data show that the first 3 quarters of 2019, housing enterprises accumulated domestic debt financing amount of 514 billion 400 million yuan, compared with the same period last year, 828 billion 700 million yuan decreased by 37.93%.

Due to the tighter regulation of domestic real estate policies and the pressure of funds from some enterprises, the cost of overseas financing of Housing enterprises is relatively high this year. Nearly half of overseas financing costs are in two figures.

Among them, a $350 million green bond issued in January and February this year is an interest rate of 15.5%. Even in Hengda, the first group, the number of US dollar bills issued in April was 10% and 10.5% respectively. In the September and October of the peak of US dollar debt, there were also two digit financing costs.

Overseas financing has not been the main source of funds for housing companies. According to the data of the National Bureau of statistics, from 1 to September this year, the real estate development enterprises reached 130571 billion yuan, up 7.1% over the same period last year. Among them, the scale of foreign capital utilization has increased by 1.4 times, but it is only 10 billion 400 million yuan.

But at this stage, overseas financing can still be an important supplement to the chain of Housing enterprises. A small listed housing company in East China told the economic news reporters in twenty-first Century that due to the small scale of the company (failing to enter the top 50), it was difficult for the company to obtain loans from the bank in recent two years. In the most difficult times, the company once relied on internal financing and private lending. The company issued two US dollar debt in the first half of the year. The cost is high and the amount is not large, but it can solve the urgent problem.

Sales side is still the focus of strength.

According to the foregoing, to some extent, issuing overseas bonds is a must. Because at the same cost, the company favors the trust financing of convenient operation and direct landing project, but because the latter has been severely controlled, it will seek overseas.

This also reflects the current situation of financing difficulties for the housing enterprises. Over the past three years (2016 to 2018), the real estate market is the longest rising cycle, and many enterprises have achieved a substantial rise in scale. But in 2019, the pressure of domestic regulation and control increased sharply, and the financing channels tightened sharply, making many enterprises unprepared.

In the early morning of October 31st, Zheng Rong announced that it issued a total of $300 million in principal notes with an annual interest rate of 9.15%. The net proceeds would be used to repay existing debts. After hitting 100 billion for the first time last year, Zheng Rong set the sales target for this year to 130 billion, with a gap of 40 billion in the third quarter. The company's demand for funds is large, and the debt scale is 47.4% in one year.

In late October, Sansheng Hongye, a housing firm in Zhejiang, issued a financial product of 12 months and a yield of 12.5% to its internal staff in 2017, but it has not been paid yet.

In order to catch up with the last train of capital, there has been a "listing tide" of housing prices in recent years. In late October, Tianbao Group and Xinli holdings have passed the hearing of HKEx and are expected to visit the capital market in the near future. The three Sunda group, which originated in Anhui, and the Hong Kong Dragon estate located in Changzhou, is not listed among the top 100 companies. It also submitted the listing application to the HKEx in October.

Hengda Research Institute's report shows that the second half of 2018, housing prices gradually usher in the peak of debt repayment. As of the end of June 2018, in addition to private financing and loans from similar financial institutions, the balance of interest bearing interest of Housing enterprises was about 19 trillion and 200 billion yuan. From the scale of payment, it is 2 trillion and 900 billion yuan, 6 trillion and 100 billion yuan, 5 trillion and 900 billion yuan and 3 trillion and 400 billion yuan respectively in the second half of 2018 to 2021.

Respondents generally believe that in the case of excessive financial pressure, the future housing prices are more inclined to work at the sales side. Among them, strive to achieve sales targets and strengthen the repayment, will be an important strategy in the next few months. At the same time, the pace of external expansion will inevitably slow down.

According to the tracking and monitoring of more than 50 key cities in the country by 58 Anju Real Estate Research Institute, as of the end of October, more than 10 brands of Housing enterprises have been discounted, and the trend of the fourth quarter housing prices reduction is expected to be reflected in more cities and projects.

In mid October, the Hunan division of the Greenland Group was exposed to the news of compulsory internal staff buying and was finally confirmed. Hengda introduced price concessions at the end of 8.

Zhang Dawei, chief analyst of Zhongyuan Real estate, also believes that if the situation worsens, it may not even rule out the possibility of selling the project. As a result, there will be a warming in the M & a market. For example, in recent days, the city of Beijing sent half of the shares of item company in the Changyang Peninsula to Vanke. SOHO China has recently announced the sale of its three office buildings after selling a number of parking spaces.