Recently, the housing rental corporate bond applied for by Chongqing Longhu Enterprise Development Co., Ltd. has been approved by the Shanghai Stock Exchange (SSE) after preliminary examination and has won approval from the China Securities Regulatory Commission (CSRC) on December 28, marking the official launch of China’s 1st publicly offered corporate bond of housing rental. The launch of the bond is an important measure for implementing the strategic arrangement of accelerating the building of the housing system characterized by diversified suppliers, multiple guarantees and a combination of housing rental and sale and propelling the housing mechanism reform and the establishment of the long-term mechanism put forward by the CPC Central Committee and the State Council and for enhancing the bonds market’s capacity of serving the real economy under the leadership of the CSRC.
Chongqing Longhu Enterprise Development Co., Ltd. will issue no more than RMB5 billion of housing-rental corporate bonds whose term will be no more than 15 years. The issuer and the debt rating are both AAA. The bonds will be issued in installments and the raised funds will be used for the issuers’ apartment programs in Shanghai, Nanjing and other 1st-tier and 2nd-tier cities. And the rental housing in the project mainly targets at young people at 20-35 years old.
General Secretary Xi Jinping stressed in the Report of the 19th CPC National Congress that housing is for living in, not for speculation. Focusing on both buying and renting and cultivating and developing the housing rental market is an important part of boosting the housing system reform. It is clearly pointed out in the “Opinions on Cultivating and Developing Housing Rental Market” issued by the State Council in June 2016 that qualified housing rental enterprises are encouraged to issue bonds and securitized real-estate products. Encouraging housing rental enterprises to issue corporate bonds and assets backed securities is one of the key tasks for the development of the SSE bond market. The launch of the housing rental corporate bond has accumulated experience for the capital market to serve the development of the housing rental industry and played a demonstrative role for accelerating the construction of the housing rental market.
Next, the SSE will earnestly implement the requirements of the Central Economic Working Conference. Besides, it will steadily fuel the product innovation of the bond market, intensify supports of corporate bonds and assets backed securities for the housing rental market, improve the supporting systems’ construction, and further enhance the exchange-traded bond market’s capacity of serving the real economy according to the deployment of the CSRC.