HONG KONG, May 11 (Reuters) - China’s Shimao Property and Longfor Properties said they had won regulatory approval to issue medium-term notes in the interbank market, a refinancing channel local developers are increasingly tapping to circumvent restrictions aimed at cooling the property market.
The homebuilders said on Wednesday they had received approval from the interbank regulator to issue the notes for 8 billion yuan ($1.2 billion) each.
The authorities has been making it harder for real estate developers to sell bonds at the exchange market, which is regulated by the China Securities Regulatory Commission (CSRC) since the second half of last year as part of measures to rein in property prices, driving companies to the dollar bond market.
According to the interbank regulator National Association of Financial Market Institutional Investors (NAFMII), some of the Chinese developers who have applied to issue medium-term notes include China Resources Land, China Vanke and COFCO Property and Gemdale Crop .
“Developers are tapping the interbank market now because the bond exchange market is completely closed,” said an executive at one developer who declined to be named due to company policy.
Interest rates for the interbank bond market are slightly higher than the corporate bond exchange, the executive added.
Earlier this year, Beijing-based Sino-Oceran Group completed in March the issue of first tranche 2017 medium-term notes totalling 4 billion yuan at coupon rates of 4.77 percent and 5.05 percent, and China Jinmao Holdings issued 2.5 billion yuan notes at 4.65 percent in April.
$1 = 6.9020 Chinese yuan renminbi Reporting by Clare Jim; Editing by Miral Fahmy