The "second arrow" continues to help private real estate enterprises to finance -
Promote a virtuous cycle of finance and real estate
Reporter Yao Jin
The Bond Financing Support Tool for Private Enterprises (referred to as the "Second Arrow") has made new progress in helping private real estate enterprises to obtain financing. In the near future, the "second arrow" will support private real estate enterprises such as Seazen Holdings, Midea Real Estate, and Excellence Commercial Management to issue bond financing, and some of the funds raised by the project will be used to ensure the delivery of buildings, promote the transformation of urban villages and urban renewal projects. At the same time, a number of bond issuance projects of private real estate enterprises are steadily advancing.
The Central Financial Work Conference emphasized that the reasonable financing needs of real estate enterprises under different ownership systems should be met without discrimination. Recently, the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission jointly held a forum for financial institutions to demand that they continue to make good use of the "second arrow" to support private real estate enterprises in issuing bonds for financing. Since the extension and expansion of the "second arrow" policy to private real estate enterprises in November 2022, it has continued to make efforts and achieved remarkable results, playing an important role in blocking the risk contagion of private real estate enterprises, promoting the reversal of market expectations, and maintaining the stability of corporate bond financing.
From the perspective of issuance scale, since the expansion of the "second arrow", 13 private real estate enterprises have been supported to issue 318.18 billion yuan of debt financing instruments. Since the launch of the "second arrow" in October 2018, it has supported more than 10 private enterprises to issue more than 130 billion yuan of debt financing instruments, driving the scale of bond issuance by private enterprises to nearly 2100 trillion yuan in the same period, which has played a positive role in alleviating the credit contraction of private enterprises and repairing the bond financing channels of private enterprises.
From the perspective of financing costs, the "second arrow" effectively reduces the coupon rate of private real estate enterprises, and significantly saves comprehensive financing costs for bond issuers. Since the beginning of this year, the financing cost of the bonds of 18 private real estate enterprises enhanced by the "second arrow" has been less than 4.7%, among which the three-year medium-term coupon rates issued by Longfor Development and Midea Real Estate are less than 3%, 4.3% and 5.3% respectively.
Judging from the market reaction, the "second arrow" has driven more financial institutions to work together to support the financing of private real estate enterprises. Insurance funds, pension funds, social security funds, securities investment funds, policy banks and other institutions actively participate in the investment, and market intermediaries such as lead underwriters also actively participate in the financing of private real estate enterprises, which plays a good demonstration effect on boosting market confidence and improving market expectations.
It is of direct significance for financial institutions to increase financing support for private enterprises, especially for private real estate enterprises, to reverse the negative year-on-year growth momentum of private investment, effectively play the role of the People's Bank of China as a directional policy tool, and control and resolve major risks in the real estate sector. Experts believe that the solid progress of the "second arrow" will make greater contributions to alleviating the problem of difficult financing and expensive financing for private enterprises and promoting the development and growth of the private economy. For financial institutions, it is important to enhance the confidence to dare to lend. Improve fault-tolerant arrangements and risk mitigation mechanisms, banking financial institutions should explore simple, easy, objective and quantifiable internal identification standards and processes for due diligence exemption, and promote the implementation of the due diligence exemption system. At the same time, we will implement the regulatory requirements for the tolerance of non-performing loans for inclusive small and micro loans, and give priority to the write-off of non-performing loans for small and micro enterprises.
"Financial support plays an irreplaceable role in boosting the development of private enterprises." Dong Ximiao, chief researcher of Zhaolian, said that on the one hand, it is necessary to further optimize the banking institution system, develop small and medium-sized banks such as private banks and community banks, and promote small and medium-sized banks to have the ability and willingness to better serve private enterprises; On the other hand, large, medium and small banks, while meeting the renewal needs of private enterprises, should actively solve the problem of "difficulty in first loans" and increase the proportion of credit loans under the premise of controllable risks.
"To support the bond financing of private enterprises, in addition to working variety innovation, we can also consider gradually cultivating a high-yield bond market at the issuance end, and effectively reduce the threshold for bond financing of various types of enterprises, including private enterprises, under the principle of matching risks and returns." Wang Qing, chief macro analyst of Oriental Jincheng, said.
It is understood that the "second arrow" promotion department will continue to adhere to the "two unswerving", fully implement the relevant requirements of the Central Financial Work Conference, continue to increase support for private real estate enterprises, meet the reasonable financing needs of enterprises, and support the construction of "three major projects" such as affordable housing. At the same time, it will continue to boost market confidence, improve market expectations, and promote a virtuous cycle of finance and real estate. (Economic Times)