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China Vanke has asked bondholders to approve repayment extensions on two onshore bonds-one worth 3.7 billion yuan due on December 28 and another 2 billion yuan bond maturing on December 15. For the latter, Vanke is also proposing added credit enhancements, possibly including a full guarantee from major shareholder Shenzhen Metro. The developer will not redeem an onshore bond due in January 2028 and will keep its 3.98% coupon unchanged. Vanke has also stopped using two major Chinese rating agencies for assessments. The moves come amid fresh downgrades by S&P and Fitch and reflect the liquidity pressures facing China's property sector as developers seek to manage repayments and preserve cash.
China Vanke, once regarded as China's largest property developer, has sought approval from bondholders to extend repayment on a 3.7 billion yuan onshore bond scheduled to mature on December 28. A filing with the Shanghai Clearing House indicated that a meeting of noteholders will be convened on December 22 to consider the proposal. Advertisement
The developer is also requesting a one-year extension on another onshore bond of 2 billion yuan that falls due on December 15. According to a separate filing, creditors will consider the addition of investor-acceptable credit enhancements for this note, including a full irrevocable joint-liability guarantee from Shenzhen Metro or another Shenzhen state-owned enterprise. Shenzhen Metro remains Vanke's largest shareholder.
In parallel, Vanke confirmed that it would not exercise the issuer redemption option on an onshore bond due in January 2028 and will maintain the coupon at 3.98% for the remaining two years. The seven-year note, with 1.1 billion yuan still outstanding, features an issuer call at the end of the fifth year, along with a coupon reset mechanism and an investor put option.
The company also disclosed that it will cease engaging China Lianhe Credit Rating and China Chengxin International Credit Rating for corporate credit assessments and bond-related ratings, stating that the decision reflects its operational needs and prevailing business conditions.
The developments follow a series of rating actions earlier this week, with S&P lowering Vanke's rating to CCC- from CCC, and Fitch announcing downgrades on several of its outstanding notes.
Vanke's latest moves reflect the continued financial strain within China's property sector as developers manage tightening liquidity and declining market confidence. By seeking extensions and preserving cash, the company appears focused on managing near-term obligations while avoiding an immediate escalation of repayment pressure.
Source - Reuters
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