Longfor Properties sees funding costs below 5pc despite credit tightening
The Chinese developer forecasts a further fall in its borrowing rates, thanks to sales growth and strong finances
The company’s average funding costs already stood at a record-low 5.18 per cent at the end of June, down from 5.74 per cent at the end of 2015.
“Our average borrowing cost will fall to less than 5 per cent by the end of the year, thanks to the company’s stable sales growth and financial position,” said Shao Mingxiao, chief executive of Longfor Properties.
Longfor, controlled by Wu Yajun, once the country’s richest woman, has the highest corporate rating from global ratings agencies among mainland Chinese private developers.
Beijing policy in recent months has pointed toward further credit tightening to ease concerns over a property bubble. Measures have included the Shanghai Stock Exchange raising the threshold for domestic corporate bond issuance among developers.
Shao said Longfor is not affected, as the policies will only make it difficult for smaller or weaker developers to raise fund.
In July, the company issued a 3.06 per cent, 5-year domestic corporate bond and a 3.68 per cent, 7-year domestic bond, totaling 3.7 billion yuan.
