Following China Orient Asset Management Co., Ltd. (“China Orient”), another national financial asset management company (AMC) joined the list of bond issuance and fundraising to resolve risks in the real estate industry.
March 13,the Great WallAsset Management Co., Ltd. (referred to as “”the Great WallAssets”) approved nationwideBankThe public issuance of RMB 10 billion financial bonds in the international bond market will mainly be used for risk mitigation in the real estate industry.
So far, real estate through various channelsM&AClass financing has exceeded 150 billion yuan.
Industry insiders believe that the issuance of M&A financing bonds by state-owned asset management companies has provided new funds and opportunities for the real estate industry. From the perspective of real estate enterprises, it is necessary to seize the policy window period, comply with the policy orientation, and improve industry liquidity through mergers and acquisitions.
The two major AMCs have successively entered the venue for “blood transfusion”
March 13,the Great WallAssets approved nationwideBankRMB 10 billion of financial bonds were publicly issued on the international bond market.
China Great Wall Assets stated that the funds raised this time will be mainly used for risk mitigation and disposal of high-quality projects of key real estate enterprises, the bailout of the real estate industry and other related non-performing assets, and the repayment of mature stock bonds.
This is another AMC joining China Orient to issue bonds to raise funds to resolve risks in the real estate industry.
On February 18th, China Oriental was in the whole countryBankThe application for the public issuance of financial bonds of no more than RMB 10 billion in the international bond market was approved. The raised funds are mainly used for risk mitigation and disposal of high-quality projects of key real estate enterprises, and to carry out the relief of non-performing assets in the real estate industry and the mitigation of real estate financial risks.
China Orient is the first AMC to be issued wholesale financial bonds for real estate bailouts after the financial regulator convened a nationwide AMC meeting at the end of January to study AMC’s participation in financial services such as mergers and acquisitions of risky real estate projects.
January 26,securitiesThe Times reporter has verified from multiple parties that the financial supervision department recently convened a meeting of several AMCs to study AMC’s participation in asset disposal, project mergers and acquisitions and related financial intermediary services of risky real estate companies in accordance with the principles of marketization and the rule of law.
Chen Xing, deputy research director of the Enterprise Division of the China Index Research Institute, believes that the debts of the two major asset management companies landed after a short period of time, indicating that the current targeted easing financing policy has been implemented very timely and quickly.
Chen Xing said that as an independent third-party financial institution, asset management companies have rich experience in risk asset disposal and are supported by financing policies. They have stronger advantages in terms of capital adequacy and professionalism. Its participation is expected to speed up the disposal of current risk-exposed enterprise projects, and facilitate risk resolution and market clearing. At the same time, state-owned asset management companies shoulder the three key tasks of “serving the real economy, preventing and resolving financial risks, and deepening financial reforms”. Smooth operation will play an important role. Overall, the issuance of M&A financing bonds by state-owned asset management companies has provided new funds and opportunities for the real estate industry.
Real estate M&A financing from various channels has exceeded 150 billion
In addition to AMC’s participation in this round of housing company bailouts, in fact, banks have already issued real estate company M&A-themed bonds in the open market to raise funds to support housing companies in resolving risks.Currently, includingShanghai Pudong Development BankChina Guangfa Bank,Ping An Bank、Industrial BankA number of banks, including many others, announced plans to issue bonds ranging from RMB 5 billion to RMB 10 billion for mergers and acquisitions of real estate companies.
February 17,Industrial BankIt is planned to issue not less than 10 billion yuan of real estate M&A themed bonds, and the raised funds will be specially used for real estate project M&A loans.Industrial BankHe said that he has recently contacted a number of high-quality real estate companies in the market.researchIts principles, standards, procedures and supporting policies for the risk disposal projects of key real estate enterprises in mergers and acquisitions, through mergers and acquisitions loans, mergers and acquisitions notes, mergers and acquisitionsfundmergers and acquisitions financial consultants, etc., focusing on supporting high-quality real estate enterprises in mergers and acquisitions of high-quality real estate projects that are in danger and difficult.
Since the beginning of this year, not only many banks have issued M&A-themed bonds, but also many banks have signed strategic cooperation agreements with real estate companies to provide M&A financing quotas for real estate companies.Among them, the largest one was January 26China Merchants BankgrantChina Resources Land 20 billion yuan M&A financing quota, dedicated toChina Resources LandM&A business, business types include but are not limited to M&A loans, M&A funds, assetssecuritiesand various types of financing products that are innovated based on M&A-related business needs.
With the increasing support of financial policies, high-quality private enterprises have also begun to appear in real estate enterprises that have received M&A financing support. March 3,Country GardenandChina Merchants BankSigned the 15 billion yuan “Real Estate M&A Financing Strategic Cooperation Agreement”,China Merchants Bankwill grantCountry Garden15 billion yuan M&A financing quota, dedicated toCountry Gardenreal estate M&A business, including but not limited to M&A loans, M&A funds, assetssecuritiesand innovative financing products derived from M&A-related business needs. On March 9, Xuhui also receivedPing An BankThe granted M&A financing quota of RMB 5 billion will facilitate CIFI to better grasp the M&A opportunities in the market.
According to statistics from the China Index Research Institute, up to now, M&A financing from various channels has reached more than 150 billion yuan. Chen Xing said that with the official entry of state-owned asset management companies, it shows that the participants in M&A activities are more diverse.
The provision of financing support by multiple entities for M&A projects of real estate enterprises is a further implementation of the central document at the end of last year.
On December 20, 2021, the central bank and the China Banking and Insurance Regulatory Commission issued the “Notice on Doing a Good Job in M&A Financial Services for Risk Disposal Projects of Key Real Estate Enterprises”, encouraging banks to carry out M&A loan business in a safe and orderly manner, focusing on supporting high-quality real estate enterprises in merger and acquisition risks and difficulties High-quality projects of large real estate companies. At the same time, increase support for bond financing, support high-quality real estate enterprises to register and issue debt financing instruments in the inter-bank market, and raise funds for mergers and acquisitions of key real estate enterprise risk disposal projects.
Chen Xing believes that from the perspective of real estate enterprises, it is necessary to seize the policy window period, comply with the policy direction, and improve industry liquidity through mergers and acquisitions activities: qualified enterprises take the opportunity to open up channels to achieve financing, and insurance companies should dispose of assets to supplement funds.
The Crane Research Center also believes that in 2022, industry liquidity risks will continue, but at the same time, merger and acquisition opportunities are also increasing. On the one hand, for companies with greater debt repayment pressure, it is imminent to turn the situation around with the help of project sales and asset sales. On the other hand, central enterprises, state-owned enterprises and some high-quality private enterprises will have greater initiative in the M&A market by virtue of their own strength and policy support. With the opening of M&A financing channels, the industry’s enthusiasm for M&A has been mobilized. Strengthening the project-level transfer and mergers and acquisitions is expected to ease the financial pressure of the insurance companies, prevent the expansion of risks, and speed up the clearing of market pressures.
(Article source: Securities Times)