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China Vanke has proposed a new plan to extend a CNY2 billion medium-term note by 12 months with additional interest payments to avoid default. The bond will accrue interest at 3% annually, paid at maturity. Bondholders will discuss the plan and vote by Dec. 22. Vanke also seeks to extend another CNY3.7 billion note due Dec. 28. The firm has repaid CNY19.5 billion in bonds this year and faces CNY10 billion maturing next year. Vanke's stock showed little reaction to the news.
Fitch Ratings has downgraded China Vanke's Long-Term Foreign- and Local-Currency Issuer Default Ratings to 'C' and Vanke HK's to 'CC'. This follows China Vanke's entry into a grace period for a CNY2 billion bond repayment, indicating heightened default risk. The company faces tight liquidity and large debt maturities, with negative free cash flow expected to persist. Fitch rates Vanke HK on its standalone credit profile due to the parent's financial distress.
