Four Chinese banks announced plans to issue RMB 25 billion ($3.94 billion) of bonds to be used in real estate purchases in an attempt to shore up the wobbling property sector, reports Caixin. Shanghai Pudong Development Bank Co. plans to borrow RMB 5 billion by selling three-year bonds to finance real estate project acquisitions.
China Guangfa Bank unveiled a plan to issue RMB 5 billion of similar bonds a week later, followed by disclosure of a planned RMB 5 billion bond sale plan by Ping An Bank Co. Ltd. and a RMB 10 billion bond sale by Industrial Bank Co. Ltd.
The proposed borrowings are in response to a notice by the central bank and the China Banking and Insurance Regulatory Commission in late December encouraging banks to provide funds to buy distressed projects from cash-strapped developers. The regulators see asset sales as a key market-oriented step toward easing a liquidity crisis that could threaten financial and social stability.
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