Bloomberg and staff reporter
China may allow banks to offer unsecured short-term loans to qualified developers for the first time, people familiar with the matter said, a major push to ease the property crisis that’s dragging down growth in the world’s second-largest economy.
As part of a package of new measures to backstop the real estate industry, regulators are considering allowing banks to issue so-called working capital loans to some developers, the people said.
Unlike other types of loans available to builders that typically require land or assets as collateral, the new financing facility would be unsecured and available for day-to-day operational purposes, potentially freeing up capital for debt repayment, the people said.
Officials are also weighing a mechanism that would allow one lender to take the lead on supporting a specific distressed builder by coordinating with other creditors on financing plans, the people said.
Implementation would require regulators to exempt bankers from being held accountable for possible bad loans given the high risks involved, the people said, adding that deliberations are subject to change.
If the support measures are approved, they would represent China’s most forceful attempt yet to plug an estimated US$446 billion (HK$3.4 trillion) shortfall in funding needed to stabilize the industry and deliver millions of unfinished homes.
President Xi Jinping is also stepping up support for the broader economy, with moves this week indicating increased urgency to stop a downward spiral in the property sector from derailing growth and endangering financial stability.
Shares of mainland developers have been rising this week on a reported draft list of 50 developers eligible for financial aid that includes Country Garden (2007) and Sino-Ocean (3377).
Meanwhile, Guangzhou had proposed that the redevelopment of existing urban villages can be started after collecting the consent of more than two-thirds of the members of the rural collective economic organization and more than two-thirds of the villagers in the village where the project is located.
The bar is lower than that in Hong Kong, which now asks for at least 80 percent of ownership for buildings built over 50 years ago.
The post Developers may be allowed unsecured loans appeared first on Hong Kong News Hub.
from
https://hongkongnewshk.com/developers-may-be-allowed-unsecured-loans/
No comments:
Post a Comment