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在线翻译:
szdaily -> Business_Markets -> 
Developers turn to asset-backed securities for liquidity
    2017-11-22  08:53    Shenzhen Daily

DEVELOPERS such as China Vanke and Country Garden are increasingly turning to the securitization market as an alternative fundraising channel as the onshore bond market remains mostly inaccessible.

Property companies in particular are stepping up the securitization of receivables from property sales, providing them with funds to develop other projects.

The securities took off when Chinese regulators made it harder for developers to sell onshore corporate bonds late last year in a bid to help cool an overheating real estate market.

The issuing of such products more than tripled in the first seven months of this year from a year ago, according to data by China Securities Research.

More than 11 Chinese developers have issued or announced plans this year to issue securities backed by sales receivables, including China Vanke, Greentown China, and the State-owned Beijing Capital Land, up from around six last year.

Developers typically record revenue in their books 12-24 months after contracted sales, when they actually transfer the property ownership to the buyers and pocket the proceeds. The asset-backed securities allow them to cash in on those receivables early.

Greentown issued 1.6 billion yuan worth of the securities this month, while Beijing Capital said that the securities provided a cheaper financing option for the company. Vanke said it considered the securities to be low-cost and low-risk.

Rates of the securities issued in the last two years were around 5 to 7 percent, slightly higher than onshore corporate bonds. The securities usually have short maturities of two to four years, and range in size from 1 billion yuan (US$151 million) to 5 billion yuan. The securities are listed in stock exchanges and traded among banks and institutional investors.

Of China’s trillion yuan overall asset-backed securities market, property companies issued around 40 billion yuan of products in 2016. More than 70 percent of the issuance was backed by receivables from property sales, according to China Securities Research.(SD-Agencies)

 

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