State-owned Chinese banks step up support for cash-strapped developers as they help to raise offshore loans
- ICBC reportedly plans to provide US$300 million in offshore loans to Country Garden backed by a domestic guarantee
- Bank of China provided Longfor Group with US$700 million on Friday, which it used to redeem a US$300 million offshore bond due in April 2023
Following a series of moves by Chinese regulators recently to ease the crisis surrounding the nation’s property sector, mainland banks have now come forward to offer offshore liquidity support to beleaguered developers.
State-owned Industrial and Commercial Bank of China (ICBC) plans to provide US$300 million in offshore loans to Country Garden Holdings backed by a domestic guarantee, according to Chinese online media outlet Cailianshe.
Country Garden and ICBC did not respond to inquiries from the Post.
“We believe that Country Garden should be able to raise offshore loans in the near future, which should further help ease investors’ concern about its liquidity,” Raymond Cheng, managing director of CGS-CIMB Securities, said in a research note on Tuesday.
“The company has proactively raised funds, including onshore bonds, project loans and equity year to date, and we believe its liquidity pressure has been markedly reduced especially after the 16 measures were announced.”