What is the role of the two 631s of Chengtou?
This 631 structure is actually the two sides of the corresponding urban investment company, one is the financing structure, and the other is the belief of the urban investment company.
From the perspective of financing structure, it generally refers to the debt composition of urban investment, such as banks accounting for 60%, bonds accounting for 30%, and non-standard accounting for 10%, which is one. However, in our usual practice, it is reasonable for banks and bonds to account for no less than 70%.
Of course, if the proportion of non-standard is too high, it means that the qualifications of the financier are relatively poor, and their financing costs will be relatively high, so the composition of debt is also what we need to pay attention to.
Then some investors will ask, since the funds of banks and bonds are cheap, why not borrow banks or bonds? Why borrow non-standard money? Is it because of bad qualifications? In fact, no, it takes time for bond funds to be reviewed and issued, and it is really necessary to rely on loans and non-standard funds when they are really in urgent need of funds or when funds are tight.
However, although the non-standard is flexible, the cost will be relatively high, so most of the funds still rely on bank loans. However, there will be many restrictions on the use of funds from bank loans, and then banks will also have requirements for counterdeposits, so urban investment companies also want to have more financing channels, so that they will be more flexible. Therefore, we will see that some relatively good urban investment platforms will also issue a small number of non-standard products, which is the reason.
Another 631 is actually talking about the debt prevention and control mechanism of urban investment companies, which is to formulate a fund continuation plan 6 months in advance, implement funds 3 months in advance, prepare sufficient debt repayment funds 1 month in advance, and resolutely adhere to the bottom line of no systemic risk. Now some real estate companies have also begun to try to prevent the risk of debt through this 631 mechanism, hoping to convey confidence to the market.
At this time, some investors will have questions, is it safer to have a platform with this 631 mechanism? In fact, no, in fact, regardless of whether there is this 631 mechanism or not, urban investment companies around the country are willing to repay and want to pay normally.
However, having the willingness to repay does not mean that they have the ability to repay, for example, urban investment platforms in weak economic areas, regardless of whether there is such a mechanism or not, will still default. There is also the recent overdue political letter in the provincial capital, which is the same reason. Could it be that if they had this mechanism, they wouldn't have defaulted? Apparently not.
Because sometimes you see some people promoting this thing, as if there is this thing, the project of this place will be safer, but this is not the logic. Again, for political and credit projects, we must first look at the regional economy, financing entities, debt structure, and local public opinion, etc., which are the criteria for judging the quality of the project.
Therefore, when you choose a project, you must look at the bottom layer of the project, which is the key. If you have anything unclear, you can leave a message in the comment area, and we will reply to you as soon as possible.