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Shares of China Vanke increased after the property developer successfully avoided an immediate default on its debt. Creditors unanimously approved extensions for two bonds that matured last month, and the company’s largest shareholder agreed to provide an additional loan to cover upcoming principal and interest payments. Consequently, its bonds also saw gains.
Vanke’s stock in Shenzhen closed 2.3% higher at CNY4.86 (roughly 70 US cents) per share, while its Hong Kong-listed shares rose 3.3% to HKD3.73 (about 48 US cents). Bonds including 21 Vanke 04, 21 Vanke 06, 22 Vanke 02, 22 Vanke 04, and 22 Vanke 06 increased in value by 10.6%, 7.3%, 9.9%, 8.6%, and 4.2%, respectively.
The creditors unanimously approved Vanke’s latest proposals to roll over two medium-term notes, 22 Vanke MTN004 and 22 Vanke MTN005, with a combined principal of CNY5.7 billion (around USD820 million). This information was confirmed through notices published on the Shanghai Clearing House’s website by the trustees overseeing these two notes yesterday.
Initially, the bonds, due in December, faced rejection after their initial extension proposals. However, creditors agreed to extend the grace periods by one month each for the bonds, providing Vanke additional time to devise a more acceptable restructuring plan.
Under the new arrangements, Vanke will first pay CNY100,000 (about USD14,400) of principal to each creditor that voted in favor. On January 28, the company will pay 40% of the remaining principal and interest owed, while the remaining 60% will be deferred for one year. During this extension, the interest rate will stay at 3%, and any additional accrued interest will be payable with the principal at maturity.
The company is expected to disburse around CNY2.5 billion in principal and interest for these bonds on January 28. Additionally, it must make an initial CNY400 million (USD57.6 million) payment for its 21 Vanke 02 bond, scheduled for due date on January 30, following an extension already approved. This means Vanke needs to raise at least CNY2.9 billion this week to meet these obligations.
While these steps help Vanke avoid default temporarily, significant challenges remain. The company’s largest shareholder, Shenzhen Metro Group, has extended a CNY2.4 billion (about USD340 million) loan at an interest rate of 2.34% to help repay principal and interest on its publicly issued debt.
Despite this relief, Vanke remains under intense financial stress. Third-party data indicates the company currently has 15 outstanding bonds totaling approximately CNY29.6 billion (roughly USD4.3 billion). Seven of these, with a combined value of CNY11.3 billion, are scheduled to mature by the end of July.
Vanke’s core real estate business is also struggling. The company reported a net loss of CNY28 billion during the first three quarters last year. Data from the China Real Estate Corporation shows that its contracted sales totaled CNY133.9 billion (around USD19.3 billion) in 2025, representing a 46% decline compared to the previous year. With sales continuing to drop, the company will likely need to pursue further debt extensions moving forward.
The decline in property prices has left many projects insolvent or unprofitable, according to Liu Shui, a research director at the China Index Academy. A critical challenge for Vanke will be providing sufficient effective assets as collateral to support its debt extension efforts.
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