Chinese companies operating in real estate sector turned to overseas financing

Almaty. July 17. Silkroadnews – Debt-ridden Chinese real estate firms are trying to attract the overseas financing, China Daily reported.
“Chinese real estate firms have turned to the overseas market to seek financing as tougher regulations have made it more difficult for them to raise funds at home. At least five property companies have announced moves to issue notes or bonds, worth more than $2 billion in total, in the overseas market since the beginning of July”, report said.
Among the companies mentioned there are such major property developers as Greentown China and Longfor Properties.
According to publication, Greentown China said earlier this week it would issue $450 million of senior perpetual capital securities to use the net proceeds to refinance the existing debt along with the purposes of general working capital.
Longfor Properties also said earlier this month it would issue senior notes due in 2020 to use the funds received for refinancing purposes only.
The companies, as reported, were forced to take such steps, as domestic financing for property developers declined after tightening market regulation aimed to restrain financial bubbles and prevent risks.
According to Centaline Property, in the first half of 2017, real estate firms raised 177.2 billion yuan ($26.1 billion), issuing bonds and promissory notes, which is a 74% drop year-on-year.
Meanwhile, a lull in the housing market means a drop in income for companies. With this, the debt on loans from companies operating in real estate in 2015-2016 reached 852 billion yuan, which is more than the total for the previous five years combined.