Vanke Seeks One-Year Extension on 2 Billion Yuan Note as Liquidity Tightens
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Signage for China Vanke Co. atop the Hongqiao Vanke Center in Shanghai on Jan. 17, 2025.
China Vanke Co. has proposed a one-year extension on its 2 billion yuan ($282 million) mid-term note due in December, marking its first public debt deferral and signaling mounting financial strain even on one of China’s strongest state-backed developers.
According to documents reviewed by Caixin, Vanke’s “22 Vanke MTN004” bond would be pushed to mature on Dec. 15, 2026, with the coupon kept at 3%. All accrued and future interest would be repaid in full at maturity — with no compounding and no upfront cash payment.
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- China Vanke proposed a one-year extension on a 2 billion yuan bond due December 2025, marking its first public debt deferral amid financial strain.
- The extension offers no upfront payment, with full principal and interest at maturity; some investors demand 10-20% cash prepayment.
- Vanke faces over 36 billion yuan in bond maturities in 2025, has nearly exhausted cash reserves, and analysts expect potential restructuring with recovery rates of 20-30%.
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Who’s Who
- China Vanke Co.
- China Vanke Co. proposed a one-year extension on a 2 billion yuan mid-term note, marking its first public debt deferral. This indicates financial strain, despite being a strong state-backed developer. The proposal, which requires supermajority approval, suggests a broader restructuring is underway. Vanke faces significant bond maturities in 2025, and its central cash reserves are nearly exhausted, highlighting the limits of local government bailouts.
- Shanghai Pudong Development Bank Co. Ltd.
- Shanghai Pudong Development Bank Co. Ltd. was an underwriter for China Vanke Co.'s "22 Vanke MTN004" bond. This three-year note, issued in December 2022, trades in China’s interbank market and is primarily held by institutions.
- Bank of China
- Bank of China was one of the underwriters for China Vanke Co.'s "22 Vanke MTN004" bond, issued in December 2022. This bond is now facing a proposed one-year extension due to Vanke's financial strain.
- Shenzhen Metro Group
- Shenzhen Metro Group is the largest shareholder of China Vanke Co. Since early 2023, they have injected 314.6 billion yuan in liquidity support over 13 rounds to Vanke, with 308 billion yuan already drawn. This support has helped Vanke meet its public debt obligations until now.
- China International Capital Corp.
- China International Capital Corp. (CICC) stated in a November 27 report that China Vanke Co.'s proposed debt extension would likely have minimal impact on the wider real estate credit market. CICC noted that Vanke's notes are now being treated similarly to those of lower-grade state-owned enterprises or local government financing vehicles, and its declining financial health has been factored into prices since late 2023.
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What Happened When
- December 2022：
- Vanke issues the '22 Vanke MTN004' three-year note.
- Early 2023：
- Shenzhen Metro Group begins injecting liquidity support to Vanke.
- Late 2023：
- Credit risk starts spreading to mixed-ownership developers as scrutiny over Vanke intensifies.
- By November 26, 2025：
- Vanke files stating it cannot make full repayment on time for its mid-term note due in December 2025.
- November 27, 2025：
- CICC releases a report assessing the spillover from Vanke's proposed note extension.
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