Chinese lender BoCom agrees $14 bln credit line with developer Vanke (updated)

Midea Real Estate Holding

23/11/2022 05:22

(adds details, background)
       BEIJING, Nov 23 (Reuters) - China's Bank of
Communications Co Ltd (BoCom)  3328.HK   601328.SS  said on
Wednesday it would provide a 100 billion yuan ($13.98 billion)
credit line to developer Vanke in the latest sign of support for
the embattled property sector.
        Chinese authorities have announced a flurry of fiscal
measures recently to ease pressure on debt-laden developers and
reverse a severe housing slump. The property sector makes up
about a quarter of the economy.
  
        Vanke is the country's second-largest developer by
sales.
  
    Under the agreement, BoCom will likely offer Vanke
 000002.SZ  property development loans, mortgage loans and loans
for merger and acquisition deals, according to a statement
released by the lender. 
        The lender will also provide funds to the developer via
letters of guarantee and bond investment, it said.
  
        The agreement is part of the bank's efforts to implement
    16 measures outlined
     by Chinese regulators to support the property sector, it
said in the statement.
  
        "BoCom will continue to fulfill the responsibility of a
state-owned bank, (and) accurately promote high-quality economic
development with high-quality financial services," it said.
  
        The bank also agreed to provide a 20 billion yuan line
of credit to Midea Real Estate Holding Ltd  3990.HK , according
to a separate statement it released on Wednesday.
  
        China's property sector, once a pillar of growth, has
slowed sharply this year due to government efforts to restrict
excessive borrowing by developers.
  
        The clampdown has triggered falls in property
investment, sales and prices, and a growing number of bond
defaults. Construction of many housing projects has stalled,
scaring away potential home buyers.
  
        In the latest policy move, China's central bank will
provide 200 billion yuan in loans to six commercial banks for
housing completions, according to a deputy central bank official
quoted by the state-run Economic Daily on Monday.  urn:newsml:reuters.com:*:nL1N32H0XR
  
        Many analysts, however, believe the property market will
take a long time to recover.
  
($1=7.1531 Chinese yuan renminbi)
 (Reporting by Ziyi Tang and Ryan Woo; Editing by Muralikumar
Anantharaman and Kim Coghill)
 ((Ziyi.Tang@thomsonreuters.com;))