Vanke Creditors Agree to Payment Extension

China Vanke has successfully obtained creditor approval for a one-year extension on a significant yuan bond, averting immediate default. This pivotal agreement saw 92.11% of bondholders backing the revised plan, which includes an upfront cash payment of 40% on the owed amount by January 30, 2026. The remaining balance will be deferred to January 22, 2027.

This development offers Vanke, one of China's last major developers yet to face a debt failure, a critical window of opportunity. The company is contending with approximately $50 billion in interest-bearing liabilities amidst a severe real estate downturn. The successful vote on this bond suggests that holders of two other bonds, originally due last month, might also approve similar extension proposals when they vote later this month.

Despite the short-term relief, investor concerns persist regarding Vanke's long-term debt repayment capabilities, reflected in its dollar bonds trading at distressed levels. The Chinese government has actively engaged, requesting Vanke to formulate a comprehensive restructuring plan, which may involve significant concessions for creditors. This comes after reduced support from its state-owned shareholder, Shenzhen Metro Group, which had previously extended over 30 billion yuan in loans.