Longhu property market development department

It is understood that three private housing enterprises, Country Garden, Longhu and Midea Real Estate, confirmed to the reporter of China Times that they were selected as demonstration housing enterprises by the regulatory authorities and will issue RMB bonds one after another this week. In order to attract investors, the founding institutions will also issue credit protection tools including credit default swaps (private placement CDS) or credit risk mitigation certificates (CRMW) to help private real estate developers gradually restore the financing function of the open market.

On the evening of May 16, Longhu Group (00960.HK) and Midea Real Estate (03990.HK) officially announced the issuance of bonds, while Country Garden (02007.HK) is still under planning. Two housing companies officially announced that they would issue bonds. The reporter of China Times saw that on the evening of May 16, Longhu Group announced that Chongqing Longhu Enterprise Development Co., Ltd., an indirect subsidiary of the company, would publicly issue corporate bonds in 2022 in China on May 18 and May 19, with the issuance scale not exceeding 500 million yuan.

Midea Real Estate also announced on the evening of May 16 that it plans to issue four-year corporate bonds with the total principal not exceeding 10 billion yuan. The value date of the bond is May 24, 2022, and the issuer adjusts the coupon rate option and the investor's option to sell back at the end of the second year. Coupon rate inquiry range is 4. 1%-4.9%. It is understood that the funds raised by Midea Real Estate's corporate bonds in this period are intended to be used to repay corporate bonds after deducting the issuance expenses.

Compared with Longhu Group and Midea Real Estate, Country Garden is still planning to issue bonds. Country Garden announced that it plans to publicly issue domestic corporate bonds with a face value of no more than RMB 500 million to professional investors in the short term. Despite this, it said that the issuance of corporate bonds is still in the planning stage and may not be implemented or eventually completed smoothly.

In response to the issuance of bonds by three private housing enterprises, Yan Yuejin, research director of the think tank center of Yiju Research Institute, said in an interview with the reporter of China Times on May 16 that the issuance of bonds is different from the medium-term notes issued in the interbank market in the past, which is more in line with the financing needs of real estate enterprises. Corporate bonds play a great role in supporting the financing of housing enterprises. Moreover, the action of issuing bonds this time is faster. After the news comes out, some real estate enterprises will definitely issue bonds, which gives a very clear and accurate guarantee for issuing bonds.