CLSA Expects ‘Flood’ of China Property Bond Issues

China’s order for banks to transfer off-balance-sheet loans may lead to a “flood” of bond issuance from real-estate companies, CLSA Asia-Pacific Markets said.

The China Banking Regulatory Commission said assets linked to wealth management products provided by trust companies must be shifted on to banks’ balance sheets by the end of 2011. The “important tightening measure” puts a funding squeeze on local governments’ special-purpose vehicles and the property industry, CLSA strategist Christopher Wood said.