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Credit line for China developers.

 

China’s state-owned banks have launched a new effort to strengthen the finances of the country’s struggling property developers, with more than Rmb220bn (31$bn) being announced yesterday in unused credit lines. Bank of Communications, China’s sixth-largest bank by assets, was the first to tell support, agreeing to an Rmb100bn credit line for Chinese developer Vanke and Rmb20bn for Midea Real Estate, in a clear sign of more excellent government support for stronger performers in the sector. BoCom said the loans would support the developers’ needs in «project developments, mortgages, merger and acquisition deals, bond investment, letter of guarantee and supply chain financing». The state banks’ loans are the first significant offering to developers after regulators decided on a support package last week that was widely interpreted as a turning point for the sector.

Vanke’s fate contrasts with Evergrande, which defaulted last year with many of its peers, including Kaisa and Fantasia, and struggled to obtain new financing. Along with its Rmb100bn loan to Shenzhen-based Vanke, BoCom offered up to Rmb20bn to Midea Real Estate, a real estate arm of Chinese home appliances heavyweight Midea Group. As a result, Vanke shares added as much as 2 per cent in Hong Kong, while Midea Real Estate gained up to 3 per cent yesterday.

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  1. Nate24 November 2022 at 10:55

    It will take more than this to turn things around for China but it's start. Vanke is one of the better managed developer from what I have seen so giving them a hand is a smart move.

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