BUSINESS

Vanke Avoids Default With Extended Bond Grace Period

Published: Dec. 23, 2025 6:49 p.m. GMT+8

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China Vanke Co. Ltd. narrowly avoids a default on a domestic bond. Photo: Bloomberg

China Vanke Co. Ltd. (000002.SZ) narrowly avoided a default on a domestic bond after creditors agreed to extend a payment grace period on Monday, though they overwhelmingly rejected the developer’s broader proposal to stretch the debt’s maturity by a year.

Bondholders of the medium-term note voted on Dec. 22 to extend the grace period for repayment from five business days to 30 trading days. This pushes the final deadline for the 2 billion yuan ($284 million) bond to Jan. 27, 2026. However, the reprieve is tenuous, as Vanke’s core plan to extend the bond’s maturity to late 2026 failed to pass.

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China Vanke narrowly avoided default by securing a grace period extension on a 2 billion yuan bond, with repayment now due by Jan. 27, 2026.
Over 90% of bondholders approved the grace period, but only 20.2% supported a one-year maturity extension; 78.3% opposed it.
Vanke faces a severe liquidity crisis, with sales down over 80% from 2020, limited state shareholder support, and bond values at about 20% of face value.

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Who’s Who

China Vanke Co. Ltd.: China Vanke Co. Ltd. (Vanke) is a Chinese property developer facing a deepening liquidity crisis. Creditors recently extended a grace period on a domestic bond, narrowly avoiding default, but rejected a proposal to extend the bond's maturity. This highlights concerns about Vanke's long-term solvency, as its sales have plummeted and its largest shareholder, Shenzhen Metro Group Co. Ltd., has signaled limits to further financial support.

Shenzhen Metro Group Co. Ltd.: Shenzhen Metro Group Co. Ltd. is a state-owned entity and the largest shareholder of China Vanke Co. Ltd. It has injected approximately 31.5 billion yuan in liquidity into Vanke since February to help repay debts. However, it signaled that this support has surpassed its "risk comfort zone" and cannot provide unlimited guarantees for Vanke's debts.

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