Chinese property developers scrap bond issues as country tightens access to corporate credit
Chinese developers must repay the equivalent of at least US$26 billion in debt over the rest of the year, as well as about US$200 billion over the next three years
Chinese property developers Country Garden and Hopson Development this week dropped their plans to issue onshore bonds as regulators tighten access to credit in the overheated sector, sources with knowledge of the matter said on Friday.
Country Garden, the nation’s leading property developer by sales, dropped its application to issue 20 billion yuan (US$3.12 billion) of corporate bonds on Monday, filings to the Shanghai Stock Exchange showed.
Country Garden, which is incorporated overseas, had intended to issue so-called panda bonds - yuan-denominated debt securities sold to local investors.
Guangzhou-based Hopson Development dropped its application on Wednesday to issue 3.1 billion yuan in corporate bonds via private placement, another filing to the exchange showed.
One of the sources, who did not want to be identified because he is not allowed to speak to media, said bond underwriters were told by regulators that corporate bonds would not be approved unless the proceeds were intended to develop homes for rent, a market segment that Beijing supports to help meet demand for affordable housing.