China bad-debt firms plan refinancing support of up to US$24 billion for selected property developers
- The PBOC will channel 80 billion yuan (US$11.8 billion) of loans through the nation’s biggest bad-debt asset managers, sources said
- The distressed debt firms in turn have been encouraged to match the amount from their own coffers
Chinese financial regulators and the nation’s biggest bad-debt management companies plan to offer as much as 160 billion yuan (US$24 billion) of refinancing support to high-quality developers in the first quarter, according to people familiar with the matter.
Under the plan first announced on Friday with little details, the People’s Bank of China (PBOC) will channel 80 billion yuan of loans through China Huarong Asset Management and its peers to selected developers at an annual rate of 1.75 per cent, the people said, asking not to be identified because the matter is private. The distressed debt firms are encouraged to match the amount from their own coffers, the people added.
The PBOC, Huarong and China Cinda Asset Management did not immediately reply to requests for comment.
The loans add to a clutch of measures issued since November to arrest the slump in China’s property market. Regulators are ramping up financial support to systemically important developers, while lowering mortgage rates and down payment requirements to boost demand.
Yet those measures are being stifled by large-scale coronavirus outbreaks after the government suddenly abandoned its zero-Covid policy. Confidence among businesses and consumers has yet to recover to pre-pandemic levels. New-home prices in 70 Chinese cities fell for a 16th month in December, official figures showed on Monday.
