The Shanghai branch of China’s State Administration of Foreign Exchange (SAFE) has ordered several major property developers that have issued offshore bonds to report by Wednesday, Oct. 27, their upcoming offshore bond maturities for the remainder of the year and submit by Friday their repayment plans, including the amount of bonds they will potentially repurchase and the status of their internal funding arrangements, according to a buyside source briefed on the matter and a source close to a major property developer.
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SAFE also specifically ordered that they cannot default on any offshore bonds before the end of 2021 without prior notice to the foregin exchange regulator, the sources said.
The order, which was first circulated among onshore investors today, came as financial news media Cailian Press, citing several anonymous sources,
reported that the National Development and Reform Commission (NDRC) will hold a meeting in Beijing tomorrow with certain real estate companies whoich are mostly U.S. dollar bond issuers with significant bond maturities. It is currently unclear what the purpose of the meeting is but the sources said the NDRC will likely communicate the same orders to the attendees tomorrow.
The official Xinhua news agency also
reported over the weekend that the Standing Committee of the National People’s Congress will roll out a new real estate tax in selected regions that will apply to residential and non-residential properties as well as land owners and property owners, but excluding legally owned rural houses.
The pilot scheme will last five years from the date when the State Council issues further details and decides on the scheme’s exact start date.
-- Katherine Shi