[ET Net News Agency, 2 December 2019] Moody's Investors Service said in a new report
that offshore bond issuance by Chinese property developers surged to US$7.3 billion in
November from an average US$2.9 billion for the previous three months, as developers
rushed to use their available quotas and took advantage of improved liquidity.
"We've seen a marked decline in offshore bond issuance since regulators tightened the
rules for issuance in July, and despite the brief revival in November, we expect issuance
will continue to slow year-on-year in 2020, with most developers having depleted their
quotas," said Josephine Ho, a Moody's Vice President and Senior Analyst.
Ho was speaking on the release of the latest edition of Moody's monthly China Property
Focus newsletter, which tracks key trends and issues in the market.
"National contracted sales growth continued to improve in October, but will likely slow
over the next 6-12 months amid tight financing conditions and regulatory controls, as well
as the high base from this year," adds Ho.
Moody's rated developers continued to outperform the market, with the 30 property
developers that it tracks -- of the 68 it rates -- recording 29.4% year-on-year sales
growth in October (three-month moving average), compared to 14.0% for the broader market.
Refinancing needs remain high for the rated developers, with around US$38.8 billion of
onshore bonds and US$24.1 billion of offshore bonds maturing or subject to put options
over the next 12 months.
Moody's expects small and financially weak developers will face higher refinancing risks
in the onshore and offshore bond markets, because of their weaker access to funding. (KL)