The scale of real estate debt extension has increased to 150.5 billion yuan, and the recovery of sales is still the core driving force for debt reduction
It seems that the problem of debt reduction of real estate enterprises, which has been anxious for more than a year, is ushering in an inflection point. In the past week, the central bank, China Banking Regulatory Commission,Bank of ChinaThe Intermarket Market Dealers Association (hereinafter referred to as the “National Dealers Association”) and others successively issued a series of measures including supporting stock loans of real estate companies and reasonable extension of bonds, which are considered by the industry to be the strongest policy support since the real estate down cycle. All kinds of signs show that the debt of real estate enterprises is expected to usher in the dawn.
Regarding the 16 financial support measures for the real estate market (hereinafter referred to as “Financial 16 Measures”), more than 10 private Representatives of real estate companies generally believed in an interview with a reporter from the “Securities Daily” that the “Financial 16 Measures” are good for the financing side of real estate companies and help “guaranteed delivery”, and the real estate market has come out of the trough, and the market still needs to recover in the future.
However, for real estate companies in danger, the current focus is still on how to carry out debt restructuring and explore ways to reduce debt such as debt extension. According to the monitoring data of the China Index Research Institute, as of November 16, the scale of real estate debt extension has reached 150.5 billion yuan, involving 40 related real estate companies; in addition, about 17 companies plan to launch debt restructuring plans.
“At present, most real estate companies that are in danger first choose to roll over the due bonds, postpone the pressure of redemption, and buy time to solve the liquidity problem.” Liu Shui, research director of the Enterprise Business Department of the China Finger Research Institute, told the “Securities Daily” reporter that real estate companies Debt conversion depends on the recovery of the market. The core assets of real estate companies are development projects. If the market is hot, the core assets can be effectively converted into cash flow. That is, if the market recovers, the difficulty of debt extension and refinancing will decrease accordingly.
Actively alleviate debt and operating pressure
The promulgation of the “Financial 16 Measures” clarifies the current main tasks of all parties involved in real estate. It is expected that in the future, real estate enterprises, especially private real estate enterprises, will receive multi-channel financing support such as development loans, bonds, and trusts.
“A two-pronged approach on both sides of supply and demand will effectively prevent the spread of debt risks of real estate companies.” Yan Yuejin, Research Director of the Think Tank Center of E-House Research Institute, told the “Securities Daily” reporter that for real estate companies that have difficulties in paying on time, “financial 16 “It will help them complete the extension and replacement of matured bonds through negotiation, provide space for capital turnover, and let real estate companies with stable operations but temporary liquidity difficulties due to industry downturns take the lead in getting out of trouble. Supporting the reasonable extension of existing loans and bonds, and superimposing the substantive implementation of financial support for “guaranteed delivery” will give real estate companies that have been out of danger a chance to breathe, and even drive the market into a period of credit repair.
Judging from the recent performance of many private real estate companies, companies are still actively raising money to supplement cash flow. After the introduction of the “Financial 16 Measures”, Country Garden announced on November 15 that it has entered into a placement agreement and intends to place 1.463 billion shares, with a total proceeds of approximately HK$3.92 billion, which will be used for refinancing of existing overseas debts, general working capital and future development. .
On the next day (November 16), Agile announced that the company planned to issue shares in a first-over-new way, with a net fund raising of approximately HK$783 million. The company said it intends to use the net proceeds from the subscription for refinancing of existing indebtedness and general corporate purposes.
What makes the market more confident is the “second arrow” – the bond financing support tool for private enterprises. While adding “direct purchase of bonds”, it mentions the central bank’s 250 billion yuan of financial support.
On November 15, the first medium-term note of the “Second Arrow” landed, and Longfor Group completed the registration of 20 billion yuan of medium-term notes; the day before, Midea Real Estate’s 15 billion yuan of mid-term note registration and issuance accepted by the Dealers Association; and more Earlier (November 11),Seazen HoldingsThe announcement stated that the company intends to apply to the NAFMII for a new registration quota of 15 billion yuan in debt financing instruments.
From the perspective of the industry, the “Second Arrow”, “Financial 16 Articles” and the unified regulations on the replacement of pre-sale regulatory funds with letters of guarantee have boosted market confidence and formed a multi-dimensional real estate market involving credit, bond issuance, trust, and pre-sale funds. The corporate financing side supports the policy system to solve the liquidity pressure faced by real estate companies in the short term.
Promote a variety of debt restructuring programs
In addition to high-quality large private real estate companies, some real estate companies that have defaulted on their debts are also actively promoting debt restructuring.
On November 15, the reporter learned from people familiar with the matter that Sunac Real Estate Group is preparing to restructure its domestic bonds and is currently negotiating the terms of the reorganization. It is reported that as of now, the company’s existing domestic bonds and related ABS total about 15.4 billion yuan. “Follow-up progress has yet to be announced.” The insider told reporters.
As early as November 1, CIFI Holdings announced that it has suspended the payment of all principal and interest payable under the company’s overseas financing arrangements, seeking a comprehensive solution to overseas debts, and is actively working to alleviate the pressure on liquidity and provide funds for business operations. Explore the disposal of overseas assets. As of the announcement date, CIFI Holdings’ total overseas debt (including bank loans, senior notes and convertible bonds) was approximately US$6.85 billion. On November 16, a relevant person from CIFI Group told reporters about the above-mentioned matters, “There is no latest progress announced yet, and I hope to go in a good direction.”
“The good news has really come. We are promoting debt restructuring and hope to get a good result.” A person from a real estate company whose debt restructuring plan has been suspended for more than half a year told the “Securities Daily” reporter. A person from a real estate company with a 100-billion-dollar level revealed to the reporter, “(The company’s) debt extension is in progress. As for whether there is an overall debt restructuring plan at home and abroad, although there is no arrangement for the time being, it does not rule out that follow-up actions will be taken.”
“Currently, about 17 real estate companies plan to launch debt restructuring plans, of which,China Fortune Land Development, R&F Properties and China Aoyuan have made progress in debt restructuring and large-scale debt rollover. However, most of the real estate companies in danger have not yet achieved overall debt restructuring, and have not yet emerged from the liquidity crisis. “Liu Shui said that the debt restructuring methods of real estate enterprises include selling assets to pay off debts, paying off debts with non-cash assets, debt extension, debt relief, increasing collateral, debt-to-equity swaps, mutual benefit bonds, etc. Currently, most real estate companies need to adopt Formulate a debt restructuring plan in combination, and choose an appropriate plan according to the company’s own asset structure, debt structure and investor requirements.
“The debt problem of real estate companies is relatively complicated, and many of their assets may have already been mortgaged for financing. What’s more, during the market downturn, it is not easy to find a debt taker or adopt methods such as the introduction of strategic investment to carry out debt restructuring.” Yan Yuejin said The reporter said that the debt restructuring during the market downturn will cost real estate companies a lot, and the interests of all parties will be more difficult to coordinate. Fortunately, the introduction of the “Financial 16 Measures” will prompt relevant financial institutions to reassess the real assets and liabilities of real estate companies.
The scale of debt extension has reached 150.5 billion yuan
It is worth noting that the “Golden September and Silver October” are not good enough, and the asset disposal during the market downturn is not smooth, which has led to an increase in the number of debt default real estate companies in the near future.
According to information from the Shanghai Note Exchange, in the first three quarters, 36 real estate companies defaulted on US dollar bonds, an increase of 24 compared with the whole year of 2021; Since October, Sanzun Group and many other real estate companies have announced that they have received liquidation petitions from creditors.
However, in the context of frequent favorable policies in the near future, some private real estate companies are expected to survive the cold winter. In fact, compared with various debt restructuring methods, rolling over existing debts is a more effective and temporary debt reduction method with a higher success rate.
Among the real estate companies that have achieved debt extension, R&F Properties has a relatively large debt scale. On the morning of November 10, R&F Real Estate announced that after voting at the bondholders’ meeting, 8 domestic corporate bonds including “H16 R&F 4” were extended, with a total bond amount of 13.5 billion yuan, and the weighted average maturity period was extended from about 4 months. to more than 3 years. In July this year, R&F has completed the overall extension of 10 US dollar bonds, totaling US$4.943 billion (approximately RMB 33.237 billion). The repayment period has been extended for three to four years, covering all the company’s medium and long-term overseas US dollar bonds.
As a result, R&F Real Estate’s domestic and foreign debt problems of 46.7 billion yuan have ushered in a turning point, giving the company at least 3 years of respite.
“The company has been negotiating the debt extension step by step, but before the negotiation was successful, it often had to pay a relatively high price. Now that there is policy support, the difficulty of negotiation will be reduced. In addition, there is also support from the trust aspect, and the coverage of the extension will be expanded.” An insider of a real estate company told a reporter from the Securities Daily that after the successful issuance of small-scale bonds before, financial institutions or some creditors would run on them, making it difficult to effectively solve the liquidity shortage. It is really used for “guaranteed delivery” or business end.
Huang Lichong, co-founder of Xiezong Strategy Management Group, told the “Securities Daily” reporter that, in fact, in the current market environment, creditors seem to be unable to find a better way to recover funds other than agreeing to an extension.
The core power of chemical bonds is still on sale
“The industrial chain of the real estate industry is very long and relatively complicated. In the long run, the core driving force for debt reduction is still the recovery of sales.” Xiao Yunxiang, a senior analyst at the Tongce Research Institute, told the “Securities Daily” reporter.
Yang Bo, deputy dean of East Hi-Tech Investment Research Institute, expressed the same view to the reporter of Securities Daily, “Resolving the debt problem of real estate companies involves a wide range of aspects, and the interests of all parties are not well coordinated. To promote the success of debt restructuring, the core is still the real estate market. Sales picked up.”
However, at present, the overall recovery of real estate sales is weak. According to the data released by the Middle Finger Research Institute, the sales of TOP100 real estate enterprises in the first 10 months fell by 43.4% year-on-year, and the decline rate narrowed by 1.7 percentage points compared with the previous 9 months. 2 percentage points. Among them, in addition to the relatively stable sales of state-owned enterprises and central enterprises, there are also some medium-sized and high-quality real estate enterprises whose sales have increased. According to the monthly sales in October released by several third-party agencies, among the top 100 real estate companies, more than 60% of the companies’ monthly sales increased month-on-month.
“Vanke held an internal meeting on the last day of October, and made deployments for the sales sprint in the last two months of this year, such as increasing the cooperation of various sales channels.” An insider revealed to reporters that before this, Vanke It has always attached importance to the cultivation of self-operated marketing channels, but this time it emphasizes being sales-oriented, and in the case of continued weakness in the market, it will make efforts to channel and sprint with all its strength in the last two months.
In addition, in order to hit the annual sales target, since November 16, Sino-Ocean Group has launched an integrated marketing campaign of “See you on Wednesday”, covering hundreds of real estate properties in more than 30 cities including Beijing, Shanghai, and Guangzhou. At the same time, the company also uses the “Double Eleven” and “Double Twelve” nodes to actively acquire new customers through online drainage, and continue to tap old and new deals.
For this,Sinolink SecuritiesThe research report pointed out that the main dilemma faced by private housing enterprises is the decline in sales and the reduction in payment collection. Under the current loose policy background, real estate companies that “have goods in hand and can sell them” can enjoy dividends and take the opportunity to seize the market.
Regarding the follow-up performance of the sales market,China GalaxyThe Securities Research Report believes that the recent adjustments to the property market policies in Beijing and Hangzhou also mean that “high-energy” cities have entered the stage of policy adjustment, and the follow-up “recognition of housing and loan” policy is expected to be further loosened. Since the transmission mechanism of housing prices is top-down Therefore, the stabilization of housing prices in “high-energy” cities has a positive effect on the entire market, and subsequent sales are expected to officially enter the recovery track.
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