Early This Year, Housing Companies Flocked To Issue Us Dollar Debt: Longer Issuance Period And Lower Cost.

In early January 10th, Jianye real estate announcements were to issue 1 US $200 million bills, which will expire on 2024 and the coupon rate is 7.25%. It is planned for existing debt refinancing and is scheduled to be issued on the new stock exchange.

According to the December 2019 unaudited contract sales data disclosed by Jianye real estate in January 7th, 2019, Jianye real estate achieved a total sales volume of 101 billion 150 million yuan in property contracts, an increase of 39.8% over the same period last year. Jianye chairman Hu Baosen once said, in 2020, Jianye will occupy 10% of the market share in Henan. Therefore, Jianye real estate will seize the financing window period to issue us dollar debt.

Financial institutions related analysis, although Jianye is 100 billion housing enterprises, but its business layout is relatively concentrated, in the financing process, its risk assessment may not be as obvious as the national layout of Housing enterprises.

In January, housing enterprises continued to release funds in a concentrated manner, including the first, Longhu, dragon, finance, Biguiyuan, Xuhui, Jia Zhaoye, ocean, Yuzhou and so on. More than 15 housing companies issued more than 5 billion 500 million US dollars financing plan. In January 8th, financing was more than $2 billion a day, and over $1 billion 500 million in January 9th.

Central Plains real estate research center data show that in 2019, housing enterprises overseas financing amounted to 75 billion 200 million US dollars, while in 2018 only 49 billion 600 million US dollars, up 52% over the same period. Central Plains real estate chief analyst Zhang Dawei said: as a whole, the real estate industry is short of funds, and the housing companies seize the window period, issuing a large amount of US dollar debt. In 2019, the US dollar debt of Housing enterprises was refreshed. US dollar financing continued to run high in 2020.

US dollar debt financing?

Under deleveraging, housing companies seek a breakthrough in US dollar debt financing. On the one hand, it is cautious about the market in 2020, and we should pay close attention to financing and replenish ammunition for the subsequent expansion. The cost of US dollar financing has been significantly reduced.

Zhang Dawei believes that most of the housing enterprises in order to cope with future market changes, accelerate the reserve fund at the beginning of this year. Recently, the cost of US dollar financing has been significantly reduced.

A research report on Tianfeng securities shows that the stock of Chinese funded US dollar debt is relatively large, with a total scale of 738 billion 330 million US dollars, which is 18.4% higher than that at the end of 2018. In terms of industry distribution, the real estate and financial sectors account for a relatively high proportion, while the total proportion of the top 4 industries is 60.5%.

US dollar debt is an important capital supplement for some housing enterprises, but it is difficult to become the main source due to the quota. The blowout of US dollar debt has great benefits in relieving some enterprises' financing. First, the overall data of US dollar debt, real estate financing continues to refresh the historical record; secondly, although various regulatory policies frequently appear, and most enterprises financing difficulties, but for normal financing, and has not tightened; third, from the future trend, the real estate industry strict control, illegal financing has been reduced, but overall, the cost of capital differentiation trend continues. From the perspective of corporate financing, there are new redemptions, some enterprises recently issued a very low cost of financing dollars, and also have higher financing costs.

The US dollar debt is not the main source of funds. From the perspective of policy impact, after the two quarter of 2019, a large amount of financing for housing enterprises was reduced, and the housing enterprises began to reduce land, especially for enterprises with less financing channels.

Fourth, the recent housing companies pay more attention to the safety of the capital chain, the market must be stable, and the most important thing to stabilize the real estate is to prevent financial risks. So in recent months, all aspects of the real estate financing policy are being regulated and tightened.

For small and medium enterprises with high debt ratio, financing will be very difficult in the future, but for large enterprises, the impact will be limited. Combined with the statistical information of the third party organizations, we can see the financing risk from the net asset liability ratio of the housing enterprises. In 2019, the net debt ratio of the top 100 housing companies in the past year showed a rising trend. The net debt ratio of highly leveraged enterprises was as high as 40%-50%.

In addition, the devaluation of the exchange rate will obviously affect the profits of the housing enterprises with high foreign debt ratio, including the interest payments on foreign debts, the amount of foreign debts payable in the current year and the exchange gains and losses of long-term foreign debts.

Cost Differentiation of capital

However, analysis of the industry, price limits everywhere, housing enterprises profit pressure. In the case of low financing cost, it is better to strive to issue bonds for better adjustment of financial structure opportunities.

Recently, Shanghai's first-rate housing sales have warmed up, and the recognition rate is about 50%-60%. Before and after the new year, the price limit in Shanghai was relaxed. Many high priced housing projects were approved for sale. The price of second-hand prices was reduced and the volume of second-hand transactions also increased. Insiders believe that this may be a reason for housing enterprises to seize the financing window period.

One phenomenon is that the financing cost of Housing enterprises is obviously differentiated. For prudent companies, financing costs are still a trend, but for higher leverage companies, the financing pressure has increased recently.

From the interest rate level, housing enterprises dollar debt financing costs differentiation, the above housing prices are mainly between 6%-15%. At the beginning of September, Longhu issued only 4% of its large US dollar financing. At present, a number of enterprises in the capital market issued US dollar financing for the first time. At the end of the year, the financing cost is reduced to less than 4%.

The interest rate of US dollar bonds issued by housing enterprises has been lowered since the second half of last year. In contrast to the issuers who issue votes between 8%-10% in the first half of 2019 and the US dollar bonds issued in the first half and the second half of the year, the issuance cost of enterprises has been significantly reduced, such as Baolong real estate, Fuli real estate, China, Yuzhou and Zhong Jun.

The US dollar debt of Housing enterprises is welcomed by the capital market, and the income of Chinese funded Housing enterprises is higher than that of US dollar bonds. Since the beginning of this year, the Markit iBoxx released the Chinese dollar debt index has achieved higher returns, the Chinese dollar debt investment class index has risen 8.4%, the high-yield debt index has risen by 11.2%, the housing companies dollar debt, investment class and high yield index rose by 12.1%, 10.7% and 12.8% respectively. Housing enterprises dollar debt index has achieved relatively high returns.