(Yicai Global) Dec 19 — Country Garden, China’s largest property developer by revenue, becomes the country’s second builder to be guaranteed by a domestic bank to secure loans from overseas lenders. It is said to be planned.
Foshan-based Country Garden could receive a guarantee of about US$300 million from the Industrial and Commercial Bank of China, Securities Daily reported today, citing recent information without details.
Longfor Group Holding received a guarantee of about 700 million yuan (US$103 million) from the Bank of China on December 9, with four state-owned banks (BoC, China Construction) offering such support following market speculation. Became the first Chinese construction company to acquire Banks, ICBC and Agricultural Bank of China will help some developers secure overseas bank loans with domestic assets as collateral.
Under the arrangement, a mainland branch of a Chinese lender will provide a financial guarantee to an affiliate of a developer registered outside the mainland or an offshore business funded by a builder to secure financing from an overseas bank. increase. The building will also have to pledge assets as collateral to Chinese lenders.
The system shows the government’s support for private developers and its commitment to helping those at risk, Securities Daily added, citing a person at a major real estate firm. The move will improve offshore credit market conditions for non-defaulting developers, restoring and boosting offshore market confidence, the person added.
Developers with good credit standings and low risk are more likely to receive this type of support, while developers at risk of default are less likely to pass application review, according to industry experts. The house tells state media.
Tospur Real Estate Consulting Senior Analyst Xiao Yunxiang said few developers would qualify given the still weak domestic real estate market and less than ideal operational and asset conditions. .
Xiao Yunxiang, senior analyst at Tosper Real Estate Consulting, said few developers would qualify given the still-slow real estate market.
“From a collateral perspective, [domestic guarantees and foreign loans] Juan Richon, Chief Executive Officer of Wilson Capital International, said:
The main reason is that developers have to commit large sums of cash or top-tier assets to the bank’s onshore branch, but some of the assets have already been used for financing, and many banks are willing to go this route. Huang added that it may not accept the assets at .
Editor: Martin Kadiev