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China Vanke has secured strong creditor approval for its revised bond repayment proposal, easing concerns of an immediate default. Bondholders agreed to defer repayment of a 1.1 billion yuan onshore bond after the developer offered an upfront payment and additional collateral. The move comes as Vanke continues negotiations on other maturing bonds worth 5.7 billion yuan. While the agreement has improved short-term liquidity and lifted bond prices, the developer still faces sizeable debt obligations over the coming months amid a prolonged slowdown in China's property sector.
China Vanke, one of the country's largest state-linked property developers, has received support from a majority of its bondholders to delay repayment of a 1.1 billion yuan onshore bond, helping reduce fears of an immediate default. The approval follows earlier resistance from creditors and came after the developer revised its proposal to include a partial upfront payment and additional collateral to secure backing. Advertisement
Under the revised plan, nearly 90 per cent of bondholders agreed to defer repayment of 60 per cent of the bond principal by one year, while Vanke committed to paying the remaining 40 per cent upfront. The bond carried a put option that allowed investors to demand repayment at this stage, raising pressure on the company's liquidity position before the agreement was reached.
Alongside this, Vanke is continuing discussions with holders of two other onshore yuan bonds with a combined value of 5.7 billion yuan that matured recently. The company is seeking similar terms on these notes, proposing to defer repayment of a majority portion for one year. Voting on these proposals is ongoing, with grace periods on the bonds nearing their end.
The successful approval of the revised plan has supported prices of Vanke's onshore bonds and improved sentiment around its Hong Kong and Shenzhen-listed shares. Market participants see the move as providing short-term relief, helping the developer avoid a default in the near term at a time when confidence in China's property sector remains fragile.
Vanke's total debt stands at around USD 50 billion, making its financial health closely watched by investors and policymakers. As one of the few large developers still viewed as having state backing, any default by Vanke could have had wider implications for buyer confidence, especially in major cities, and added pressure on an already weakened property market.
In recent months, Vanke has repeatedly sought extensions on debt repayments as sales slowed and access to funding tightened. The company has also received loan support from its largest shareholder, a state-linked entity, which has helped it meet immediate obligations while negotiating with creditors.
Despite the recent progress, analysts point out that Vanke faces a steady pipeline of bond maturities in the coming quarters, with around 2 billion yuan falling due each month in the near term. This means further negotiations or restructuring efforts are likely as the company works to stabilise its balance sheet.
Source Reuters
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