Defaults, tighter regulations and a challenging market haven’t damped investors’ appetites for Chinese property bonds
As of June 2, real-estate companies from China had sold $20.3 billion of dollar bonds this year, according to Refinitiv, a 16% increase over the same period last year.
Heavy bond issuance from Chinese developers is “completely contrary” to market expectations for a decline in deals, said Owen Gallimore, head of credit-trading strategy at ANZ. He said alongside debt sales by Chinese tech firms, this was offsetting subdued supply from state-backed companies. “When deals come, the investor demand is enormous,” Mr. Gallimore said.
Last week, Times China Holdings Ltd. got more than $4.8 billion of orders for a $400 million, three-year junk-bond deal yielding 5.55%, according to a notice from one of the underwriting banks. The bonds from Times China, which is based in the Southeastern province of Guangdong, were rated 3-4 notches below investment-grade.series of official moves
intended to calm the property market and reduce indebtedness among real-estate companies. Among other measures, regulators have told banks to cap property lending, and a system of “three red lines,” widely reported in local media, essentially requires financially weak players to reduce their debts.
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