China Set for More Residential Mortgage Bonds as Minsheng Sells

China is poised to get more bonds backed by home mortgages as policy makers revive offerings to support the property market.

China Minsheng Banking Corp. plans to sell the nation’s third residential mortgage-backed note since authorities brought back issuance in July 2014 after a six-year hiatus. It will sell 779.5 million yuan ($125.5 million) of the securities July 10, a statement on ChinaBond website July 3 shows. China Construction Bank Corp. has also been approved to offer 50 billion yuan of RMBS, according to a statement last week.

The government is expanding funding channels in the 29 trillion yuan bond market to help property companies weather a housing slump and stock plunge. While China started allowing securitization in 2005, it halted development in 2009 after a collapse in subprime RMBS triggered the global financial crisis.

There have been two deals since the renewal of sales last year, according to data compiled by Bloomberg. Postal Savings Bank of China sold 6.81 billion yuan of RMBS in July 2014 and China Merchants Bank issued 3.15 billion yuan of notes in March, the Bloomberg-compiled data show.

The lead underwriter for Minsheng’s offering is Citic Securities Co., according to the statement. The sale will include a 39.5 million yuan subordinate tranche, which Minsheng itself will buy, it said.

— With assistance by Judy Chen

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