SHANGHAI, Jan 18 (Reuters) – Property developer shares rose on Tuesday after a Chinese lender unveiled a plan to issue debt to fund real estate acquisitions – the first bank to do so – while Beijing sought to reassure investors about the broader impact of defaults on bond markets.
Shanghai Pudong Development Bank Co (600000.SS) plans to raise 5 billion yuan ($790 million) by selling three-year bonds through China’s interbank market, it said in a filing on Monday. The funds would be used to finance real estate project acquisitions in the form of lending, it said.
The bond sales plan by the Shanghai government-controlled bank pointed to a broadening of financing channels for the property sector and more financial institutions were expected to follow suit, analysts said.
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Beijing is already encouraging large property developers to acquire assets from cash-strapped real estate firms to ease liquidity pressure. Developer China Merchants Shekou Industrial Zone Holdings Co (001979.SZ) said last week it planned to issue bonds for real estate acquisitions.
China will also make it easier for state-backed property developers to buy up distressed assets of debt-laden private firms by not counting such loans as debt under rules that cap borrowing, a source told Reuters this month. read more
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