(Yicai Global) Nov. 23 -- With the government encouraging developers with quality assets to raise money in the open market, China Vanke has applied to the National Association of Financial Market Institutional Investors for a shelf offering of bonds worth CNY28 billion (USD3.9 billion), the self-regulatory organization said yesterday.

A shelf offering allows a company to register a new issue but sell the securities in batches. The issuer can prepare a prospectus for the proposed offering in advance to determine the financing scale, while making multiple offerings during the effective financing plan period.

It is a part of the Shenzhen-based real estate giant’s latest big financing plan. Vanke’s board agreed to ask to a general meeting of shareholders to approve the sale of up to CNY50 billion of direct debt financing instruments, valid for three years, the company said on Nov. 21.

The debt instruments include onshore and offshore corporate bonds, medium- and short-term commercial paper, perpetual bonds and asset-backed securities, and the proceeds raised will be mainly used to adjust the corporate debt structure, replenish working capital and carry out investments in projects such as long-term apartment rentals, logistics properties, industrial parks and elderly homes, it said.

At the end of three of the past four years -- 2018, 2019 and 2021 -- Vanke submitted new financing plans worth CNY30 billion to CNY35 billion. It plans to raise CNY50 billion this time.

In addition to Vanke, a number of other non-state developers have announced plans for shelf offerings, after the regulator continued to issue documents to support builders with quality assets to raise money publicly. Longfor Group Holdings plans to raise CNY20 billion. Seazen Holdings, Midea Real Estate Holding, and Gemdale seek CNY15 billion each.

With intensive policies to support good real estate enterprises to issue debt, the financing environment has improved greatly for Chinese developers, and more are expected to unveil bond sale plans, Liu Shui, with the business department of the China Index Academy, told Yicai Global.

Editors: Tang Shihua, Peter Thomas