How long can developers carry real estate debt at the peak of 300 billion yuan?

category:Finance
 How long can developers carry real estate debt at the peak of 300 billion yuan?


A senior person in the real estate industry pointed out to Sino-Singapore Jingwei Client that the maturity of real estate corporate bonds issued in 2015-2016 is mainly based on the structure of 3+2 years, which means that the two years of 2018-2019 will be concentrated on maturity.

Analysts point out that the credit fundamentals of real estate debt in the second half of the year are marginally weaker than those in the first half. Liu Xiaoping, Deputy Director of Fixed Income Department of Yinhua Fund, pointed out at the recently held Forum on Credit Risk Prospects in the Bond Market in the Second Half of 2019 that the downward pressure of real estate enterprisessales and the tightening of financing were great. The financing environment of real estate bonds in the first half of the year was obviously better than that in the second half of the year, and it was difficult to borrow new or old bonds or resell stock right bonds From these perspectives, the credit fundamentals of real estate debt in the second half of the year are obviously worse than those in the first half.

At the same time, the intensification of credit differentiation of real estate debt has become the consensus of the industry. Recently, a number of media reports said that nearly 300 small and medium-sized Housing enterprises declared bankruptcy, and even more housing executives bluntly said that although more housing enterprises did not go bankrupt, but there was no business increment, already vegetative state.

Leverage-controllable head enterprises are still strong in resisting risks, while non-head enterprises are under great financial pressure. Especially high-leverage and regional non-head enterprises, risks will gradually be released. So we can see that there are more cases of small and medium-sized real estate companies going bankrupt or being merged, and there are more cases of tail real estate companies defaulting on bonds. Liu Xiaoping said.

Concerns about residentsleverage ratio and real estate crowding out credit resources have prompted policy makers to tighten property financing policies once again.

From the point of view of the traditional financing channel of bank loans, the office of the Banking Insurance Regulatory Commission issued the Notice of the Office of the China Banking Insurance Regulatory Commission on the Special Inspection of the Real Estate Business of Banking Institutions in 2019, and decided to carry out the special inspection of the real estate business of banks in 32 cities, focusing on the risk management of real estate business and housing. The management of real estate credit business, the misappropriation of credit funds to the real estate sector and other industries and off-balance sheet business, etc.

Non-standard financing channels are also tightening. Recently, according to the Securities Times, the CBRC recently issued the Circular of the Trust Department of the China Banking Insurance Regulatory Commission on Further Performing Trust Supervision in the Second Half of the Year (Trust Letter No. 2019) to the Trust Regulatory Departments of the Banking Insurance Regulatory Bureau (except Liaoning, Guangxi, Hainan and Ningxia), or No. 64, to convey the second half of the year supervision. A key. Among them, it points out that monthly monitoring of real estate trust business changes, timely supervision interviews, on-site inspection, suspension of part or all of the business, revocation of executive qualifications and other measures, resolutely curb the momentum of excessive growth and risk accumulation of real estate trust.

Under the situation of high-pressure supervision, real estate trust has braked. According to Puyi Standard data, 62 trust companies issued 1827 collective trust products in July, an increase of 19.26%. The number of collective trust products increased by 268 items annually, an increase of 21.51%, and the trust scale expanded as a whole. However, the newly issued and established real estate collective trust declined by 5.74% and 6.02% respectively in July.

In addition to trust channels, overseas debt issuance channels are also limited. On July 12, the website of the National Development and Reform Commission issued the Notice of Requirements for Registration of Application for External Debt Issuance by Real Estate Enterprises, requiring real estate enterprises to issue foreign debt only for the replacement of medium and long-term foreign debt due in the next year.

Meng Xiangjuan, an analyst with Shen Wanhongyuan, said that refinancing of non-standard Housing enterprises in the debt structure was most affected. From the point of view of the restricted way of real estate financing, the second half of the real estate trust can not add new balance, secondary qualification restriction on the direct controlling shareholders has the greatest impact. Mainly because, on the one hand, the scale of real estate trust financing is larger than that of domestic and foreign bond financing. The total amount of new real estate trust in 18 years totals 871 billion yuan, the net amount of domestic bond financing is 207.8 billion yuan, and the net amount of overseas bond financing is 362.7 billion yuan. On the other hand, it is potentially irregular compared with bank development loans and standard bond financing trust financing. More, especially land financing. Meng Xiangjuan said.

Will there be more defaults?

At present, there are four companies defaulting in the real estate industry, namely Yin billion shares, Zhonghong shares, state-owned purchases, and Huaye capital, involving an amount of 2 billion yuan. Compared with other industries, the overall default rate of Housing enterprises is still low. According to Anxin Securities statistics, the default rate of Housing enterprises is 0.1%, ranking 23rd in 26 industries, far lower than the electrical equipment and light industry manufacturing industries.

Under the impact of tightening financing channels and facing the peak of debt repayment, will more housing enterprises go on the road of default?

Meng Xiangjuan believes that in the context of overall tightening of industry financing and sales pressures, small and medium-sized Housing enterprises with high leverage, poor short-term debt repayment indicators and weak profit turnover should be avoided.

Zhu Lin, senior analyst of Oriental Jincheng, pointed out to the clients of Zhongxin Jingwei that we need to pay attention to the following characteristics: firstly, the scale of debt expansion is too fast and the scale of debt is large, the burden of debt is heavy, the proportion of short-term interest-bearing debt in debt structure is high, the coverage of cash assets on short-term debt is low, and liquidity pressure is high; secondly, we need to pay attention to the housing The ratio of limited assets and equity pledge of subsidiaries is high, and the financial elasticity is weak. Third, the efficiency of asset turnover is low, the pressure of de-industrialization is high, the period of cash flow return is long, and the operational cash flow tends to deteriorate. Fourth, the cost of land reserve is obviously high. Fifth, the proportion of commercial and residential land reserve with slow de-industrialization is high. Sixth, the proportion of non-residential land reserve is high. The function of hematopoiesis of industrial business itself is insufficient. Real estate enterprises need to speed up the rhythm of inventory removal, speed up sales and withdrawal of funds, speed up turnover, improve cash flow, and restore some of the endogenous financing capacity. Do not blindly seize land, live within your means, control the rhythm of land expenditure and sales repayment; make full use of innovative financing channels such as CMBS, REITS, ABS of supply chain financial factoring. Zhu Lin suggested. Source: Guo Chenqi_NBJ9931, Responsible Editor of CNN

Zhu Lin, senior analyst of Oriental Jincheng, pointed out to the clients of Zhongxin Jingwei that we need to pay attention to the following characteristics: firstly, the scale of debt expansion is too fast and the scale of debt is large, the burden of debt is heavy, the proportion of short-term interest-bearing debt in debt structure is high, the coverage of cash assets on short-term debt is low, and liquidity pressure is high; secondly, we need to pay attention to the housing The ratio of limited assets and equity pledge of subsidiaries is high, and the financial elasticity is weak. Third, the efficiency of asset turnover is low, the pressure of de-industrialization is high, the period of cash flow return is long, and the operational cash flow tends to deteriorate. Fourth, the cost of land reserve is obviously high. Fifth, the proportion of commercial and residential land reserve with slow de-industrialization is high. Sixth, the proportion of non-residential land reserve is high. The function of hematopoiesis of industrial business itself is insufficient.

Real estate enterprises need to speed up the rhythm of inventory removal, speed up sales and withdrawal of funds, speed up turnover, improve cash flow, and restore some of the endogenous financing capacity. Do not blindly seize land, live within your means, control the rhythm of land expenditure and sales repayment; make full use of innovative financing channels such as CMBS, REITS, ABS of supply chain financial factoring. Zhu Lin suggested.