http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akRO6Gor2Y5g

May 6 (Bloomberg) -- China’s biggest developers are borrowing record amounts in Hong Kong, taking advantage of lower interest rates to circumvent a lending crackdown at home.

While banks demand at least 5.2 percent in annual interest for three-to-five year money in mainland China, the cost of credit in Hong Kong dollars has fallen to the least since November 2004, according to data compiled by Bloomberg. China Overseas Land & Investment Ltd.agreed to an HK$8 billion ($1.03 billion) loan in February that pays 1.45 percent at current market levels, the data show.

“For property developers to keep growing in what is an extremely fragmented and competitive market they have to go offshore” for funds, said Brayan Lai, a credit analyst at Credit Agricole CIB in Hong Kong. “It’s one way to circumvent tight onshore credit.”

Syndicated borrowing by Chinese developers in Hong Kong dollars jumped to HK$37.3 billion this year, the most since Bloomberg began compiling the data in 1999, from HK$3 billion in the same period of 2009. Total lending in the city rose six-fold to HK$63 billion from HK$8.7 billion as Chinese banks’ share of the market fell to 21 percent from 29 percent, while yuan- denominated lending to Chinese developers dropped by 25 percent.

China Resources Land Ltd. said on April 30 that it agreed to four loans with banks totaling HK$6.2 billion. Agile Property Holdings Ltd., a developer with projects in 20 Chinese cities and districts, borrowed $125 million in January from a Bank of America Corp. unit in Hong Kong, Bloomberg data show.