Chinese property developers stepped up borrowing through bond sales to ease capital pressures as the Covid-19 outbreak slammed the brakes on the housing market. They are benefiting from sharply lower rates as authorities pump liquidity into the financial system, reported Caixin.
During the week of March 5-11, major property companies issued 22 bonds totaling RMB 29.2 billion ($4.17 billion), up 38.4% from the previous week, according to real estate data cruncher CRIC.
During the first 11 days of March, developers sold RMB 43.4 billion of debt, including RMB 23.8 billion in the domestic bond market and RMB 19.6 billion offshore, CRIC data showed. That compared with RMB 57.9 billion of bond sales by developers in February.
Developers are picking up the pace of borrowing to supplement capital flows as the novel coronavirus outbreak slows housing sales. As people stayed home since January, developers across the country have experienced sharp sales declines. In February, total sales by China’s top 100 developers plunged 43.8% from the previous month and 37.9% from a year ago, according to CRIC.