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State-owned bond company to guarantee notes worth US$2.7 billion issued by Chinese developers
- China Bond Insurance Company, together with the National Association of Financial Market Institutional Investors and the China Real Estate Association, met 21 firms on Tuesday, Securities Daily says
- Regulators are keeping an eye on the financing challenges that these companies are facing, analyst says
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The state-owned China Bond Insurance Company is expanding support to a dozen private developers by guaranteeing bonds worth 20 billion yuan (US$2.7 billion).
The company, together with the central bank-backed National Association of Financial Market Institutional Investors (NAFMII) and the China Real Estate Association, met 21 private property companies on Tuesday, state-run media Securities Daily reported.
Sources familiar with the matter confirmed that the meeting took place, but added that the details of the bond to be guaranteed were not yet available.
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News of the meeting comes days after several major developers reported facing debt issues, which added to concerns among investors and rating agencies about these companies’ future operations.
Sixteen developers have since August this year joined a pilot programme under which they can issue bonds or asset securitisation products that are guaranteed by China Bond Insurance.
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Developers such as Longfor Group Holdings, Midea Real Estate, Seazen Group, Country Garden Holdings and CIFI Holdings Group are among firms that have issued bonds worth 8.37 billion yuan since August that have been guaranteed by China Bond Insurance, according to NAFMII. These companies are also driving the second phase of the state-owned company’s pilot. Other private builders such as Radiance Group, New Hope Group as well as Agile Group are also taking part in the programme.
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