Vanke bondholders reject one-year payment extension, heightening default risk
China Vanke, a state-backed developer with a portfolio in top-tier cities, failed to win bondholder approval for delaying a bond payment due Monday by another 12 months. The outcome, disclosed in a filing, renews concerns about liquidity at a company that has long been a marquee name in China’s property sector and echoes the broader strains facing the industry after a string of high-profile defaults.
The three-day voting window concluded with bondholders voting against the extension, leaving Vanke with a five-business-day grace period to settle 2 billion yuan (about US$280 million) on its onshore bond, according to a filing with the National Association of Financial Market Institutional Investors.
Industry observers suggest that Vanke could seek to widen the grace period to 30 business days, a move that would buy more time for management to engage with investors and attempt to reach a consensus. “If bondholders approve, it would provide additional time for dialogue and alignment,” noted Yao Yu, founder of the credit research firm RatingDog.
Vanke did not immediately respond to Reuters' request for comment outside of trading hours regarding the bondholder rejection.
