China Vanke, a state-backed property developer, is seeking bondholder approval to delay repayment of a 2 billion yuan ($282.6 million) onshore bond. The move has ignited concerns across financial and property markets. This public bond extension would be a first for Vanke, a well-known company with numerous projects in China’s major cities. Vanke is one of the largest residential developers in China, focusing on property development and related services. The company plays a significant role in China’s real estate market.
The bond is scheduled to mature on December 15, with a bondholder meeting planned for December 10. Details of the extension terms were not provided in the filing. Vanke also has another yuan bond, valued at 3.7 billion yuan, due on December 28, while its next dollar bond maturity is in November 2027. News of the potential restructuring caused Vanke’s bonds to tumble earlier this week, reviving doubts regarding government support for the struggling property sector.
Several of Vanke’s yuan bonds experienced sharp declines, triggering trading suspensions by the Shenzhen Stock Exchange. The market is closely watching how Shenzhen addresses Vanke’s debt. Reuters reported that China International Capital Corporation (CICC) has been brought in to assess Vanke’s debt, with debt restructuring considered as an option. Vanke’s Hong Kong-listed shares fell 6.3%, while its onshore shares slid to their lowest level since 2008.
The broader Chinese property market continues to face challenges. New home prices fell in October at their fastest pace in a year. Despite some supportive measures from the government, large-scale new stimulus has not been forthcoming. Shenzhen Metro Group, which holds a 33% stake in Vanke, has agreed to provide loans of up to 22 billion yuan through 2026, secured against collateral from Vanke.
