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Bond Market News
PBOC Introduces $42bn Relending Program Alongside Slew Of Measures for Property Sector
May 20, 2024
The PBOC announced a whole host of measures to support the property sector, including a RMB 300bn ($42bn) relending program with cheap funding to banks for select SOEs to buy unsold homes from developers. The loans would carry an interest rate of 1.75% with a one-year term, and will be allowed to roll over four times. The PBOC’s Deputy Governor Tao Ling said that the program would translate into ~RMB 500bn ($69bn) of overall credit into the system. The PBOC said it would also reduce the minimum down-payment to 15% from 20% for individuals buying their first homes, and to 20% from 25% for those buying their second homes. Also, the PBOC said it would cut interest rates by 25bp for property buyers who use the personal housing provident fund. Further, they removed the minimum limit on commercial mortgage rates.
Dollar bonds of Seazen, Vanke and Longfor continued to top the gainers list, up by over 4-5% on Friday and seeing gains of over 15% in the prior week.
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