Recently, a number of companies affected by the real estate control policies to cancel the issuance of bonds.Firms are being asked if they violated regulations or play a role in driving up prices in "land king" auctions.
Shanghai Stock Exchange information shows that on February 22, the first home buyers limited liability company 5 billion yuan small public offering, 5 billion private bonds and other corporate bonds state "stop"; February 21, one of the four AMC Oriental assets subsidiary of China Eastern Asset Management (International) Holdings Limited ("Oriental International") 2.8 billion small public offering of corporate bonds is also the "suspension".
Since November 2016, the real estate company debt issue is "frozen" state. From the company feedback document, the regulators are still focused on the focus of the regulation of hot spots in the city there is auction "to the king" behavior.
Bloomberg: China Said to Mull Curbs on Private Bonds Sold by Property Firms
Builders that aren’t qualified to sell public bonds regulated by the CSRC will be added to the association’s list of companies banned from issuing securities in private placements. Two calls to the general office of SAC went unanswered.Bloomberg: These Chinese Developers Are Making Their Creditors Anxious
The notes of Sunac China Holdings Ltd and Dalian Wanda Commercial Properties Co. may come under more pressure this year as the groups branch out into non-core businesses. Purchases by highly leveraged Chinese developers unrelated to real estate raise the “knee-jerk question” of whether they might be having problems with their existing business, said Bryan Collins, a fixed-income portfolio manager at Fidelity International in Hong Kong.Bloomberg: These Chinese Junk Bond Issuers Are at Risk if the Yuan Falls 10%
With the consensus outlook for the yuan to avoid a 10-percent-scale drop, investors are happy to buy the dollar bonds. Most of the vulnerable companies that issued recently are "repeat issuers with good track records and known to investors," Moody's said.Counterpoint from Barron's: Why Chinese Real Estate Stocks Are Rallying
We are likely to see supply discipline in the property market, much like what we witnessed in China’s steel industry. Last year, land supply from local governments already reached the lowest level since 2009, a good 50% below the peak in 2013. China’s State Council recently issued a new National Land Planning Outline, emphasizing that local governments must optimize the use of land. The local governments have an incentive to keep land prices high to milk more revenue from every acre they sell. In 2016, new construction starts were already about 30% below the peak 2013.