Bonds Mar 20

Real estate firms living on short-term cash

Hundreds of companies have 500 billion yuan of bonds due for redemption, much of it borrowed as short-term paper and used to manage cashflow, a local daily says  

by Chris Gill
Real estate firms living on short-term cash

Cashflow pressure expected to intensify as 500 billion yuan of paper redemptions loom

About 500 real estate companies have 500 billion yuan of bonds due for redemption, much of to borrowed in the form of short-term paper used to manage cashflow, Securities Daily reports. 

According to incomplete statistics the report said that 16 real estate companies have raised a total of 55.5 billion yuan on domestic and overseas financing programs in the past year. Overseas investors accounted for US$2.9 billion of that. 

"Development companies usually have relatively loose cashflow arrangements, especially in the first quarter, and it is expected that the pressure on cashflow from the beginning of the second quarter will be more intense," Pan Hao, a new house analyst at the Shell Research Institute, said in an interview. "The relatively friendly financial environment during the epidemic will also accelerate the pace of housing companies' debt issuance."