China Orient issues US$1.6 billion bond as it heeds Beijing’s call to acquire soured assets of distressed property developers
- China Orient Asset Management three-year onshore bond will carry a coupon of 2.5 per cent to 3.5 per cent
- It is the first bond sale by one of China’s five big asset management companies to support the nation’s US$2.8 trillion housing market
China Orient Asset Management, a state-backed bad loan manager, is issuing a 10 billion yuan (US$1.6 billion) bond, answering Beijing’s call to help deal with distressed asset sales in the nation’s property sector.
China Orient will accept subscriptions for its three-year onshore bond, carrying a coupon of 2.5 per cent to 3.5 per cent on Friday, with the proceeds to be used to “help with the disposal of bad assets and resolve financial risks in the property market”, according to a filing to the National Interbank Funding Center.
It is the first bond sale by one of China’s five big asset management companies (AMC) to support the nation’s 18 trillion yuan housing market. With a slew of developers struggling with mounting debt payment this year, they are rushing to sell assets to raise much-needed cash to pay down debt, which has resulted in increasing mergers and acquisitions in the industry.
“It’s positive news for developers and the whole property industry, as it will speed up asset disposals of distressed companies and ease their funding pressure,” said Chen Xiao, senior analyst at Zhuge Zhaofang Research Centre, the research arm of its namesake online property agency.
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Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt
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