Weak City Housing Enterprises Financing Polarization, Vanke Bond Interest Rate As Low As 3.15%

One of the themes of real estate in 2019 is the difficulty of financing. Since September, the interest rate of foreign dollar bonds of many housing enterprises has risen to about 13%.

Against this background, the financing advantages of large leading housing enterprises are highlighted. Vanke, China shipping, Huarun, poly and other housing enterprises can get low-cost financing on the market, and then expand in adversity.

The financing costs of some small and medium-sized Housing enterprises are rising, which not only restricts the future profit margins, but also brings the risk of capital chain breakage.

Leading edge highlights

In the morning of November 13th, Vanke announced that the subsidiary Vanke Real Estate (Hongkong) Limited (hereinafter referred to as Vanke Real Estate Hongkong) set up a $2 billion medium-term note plan in July 2013, and in September 2016, within the authorized scope of the board of directors, the medium-term note scheme was further upgraded to $3 billion 200 million, and it continued to update to 9 billion 500 million US dollars in the following years.

Based on the medium-term note scheme, Vanke Real Estate Hongkong has recently issued fourteenth issues: the 5.5 year fixed rate of $423 million, the coupon rate of 3.15%, and the 10 year fixed rate note of $300 million, with a nominal coupon rate of 3.5%.

So far, Vanke has issued 2 US dollar debt financing plans. The first one was in March. The amount of financing was $600 million and 5.25 year fixed rate notes, with an annual interest rate of 4.2%.

Prior to the beginning of September, Longhu also issued a large amount of dollar financing only 4% interest rate; in July, China issued 1 1 year 10 dollar debt, the annual interest rate is only 3.45%, is the lowest interest rate bond issuance of Chinese funded Housing enterprises.

The lower average interest rates of Vanke, Longhu and China are strongly contrasting with the high interest rates of other housing companies.

For example, Dexin China intends to issue a 100 million dollar extra Senior Note rate of 12.875%. Jia Zhao intends to issue 300 million US dollar preferred notes due in November 12, 2023, with a coupon rate of 11.95%, and Hongyang real estate issue 150 million US dollars 2022 due notes, with a 9.95% interest rate.

In November, despite the tightening of various policies, the amount of US dollar financing of Housing enterprises is still refreshing. The Central Plains real estate research center statistics show that in early November, the housing enterprises plan has released US $3 billion financing.

Prior to that, in October, there were 13 housing companies issuing nearly $5 billion financing plan. In September, single month real estate enterprises overseas financing of US $3 billion 797 million and US $1 billion 580 million in August.

Cumulative data comparison, as of November 5th, 2019, housing enterprises jointly issued overseas plan financing $59 billion, compared with the same period in 2018 rose nearly 50%.

Zhang Dawei, chief analyst of Zhongyuan Real estate, thinks that, as a whole, although all kinds of regulatory policies appear frequently, it has increased the financing difficulty of some enterprises, but normal financing has not been tightened.

10-11 months, the housing enterprises seize the window period, a large number of large amount of the issue of U.S. dollar debt, 2019 Housing enterprises dollar debt refresh record is a foregone conclusion.

The blowout of US dollar debt is of great benefit to alleviate some enterprises' financing. It is an important supplement to some housing enterprises, but it is difficult to become the main source because of the quota.

In terms of specific enterprises, the market differentiation is obvious. Recently, some housing enterprises have increased the financing difficulty, but the financing cost of most enterprises is still stable. For a sound business, the financing cost is still decreasing. However, for the enterprises with relatively high leverage, the financing pressure has increased recently.

From the perspective of corporate financing, there are new redemptions, some companies recently issued a very low cost of financing dollars, and there are also high cost of corporate financing.

After the two quarter of 2019, a large amount of financing for housing enterprises decreased, and for those enterprises with less financing channels, the pressure would be very large.

At present, trust and overseas financing are standardized rather than comprehensive suspension. For small and Medium Housing enterprises and high debt rate housing enterprises, the financing of the future is expected to be very difficult, but for large enterprises, the impact is relatively limited.

Capital safety to the first place

In the four quarter, housing companies are more concerned about the safety of the capital chain, and the real estate market must be stable. The most important thing to stabilize the real estate market is to prevent financial risks. In recent months, all aspects of the policy of real estate financing are being regulated and tightened.

Sunshine City Group Executive Vice President Wu Jianbin pointed out that this year's real estate market is very difficult, not only small and medium-sized real estate enterprises difficult, large real estate enterprises are also very difficult, everyone has their own difficulties, the land reserve company is difficult, no land reserve company is also difficult.

In this case, housing enterprises must emphasize cash flow management, especially at present or in the future. There must be funds that can be mobilized at any time. This fund is not several billion. It should be that tens of billions of funds can be mobilized at any time, so that your finances can be flexible.

He believes that because of the strict implementation of policies, the market is already a policy city, and many resources will be concentrated on the head enterprises. Therefore, if you want to take this resource, you have to pay a heavy price, and the cost of financing is very high.

"I heard that some SMEs have more than 20% financing costs. Such a high cost of financing, the business can not be done.

Another real estate senior industry believes that the role of Finance in real estate is becoming more and more important. In the future, under the condition of total debt management, it is almost impossible to increase liabilities.

From the cost of financing, the cost of financing seen in the financial report is about 7%, but the cost of financing of the 100 real estate enterprises is even higher than this.

"In the future, housing companies need to cooperate with banks in depth. A bank may not be enough. There must be two or three companies. Housing companies lacking financial background will be more vulnerable. If 3-4 main lending banks and diversified and diversified financial institutions controlled by the loan banks can support them, then they will be able to succeed slowly. " These people said.

At present, the overall financing environment should be treated according to the most prudent attitude. At least, at present, no financial institutions will be relaxed, and even continue to check into the real estate related situation.

Wu Jianbin reminded that, regardless of the size of Housing enterprises, in terms of leverage to add enough, many housing enterprises plus eight or nine of the lever, this era is almost over. "We must never think of promoting the development of a housing company with high leverage. This era is no longer there."