Report from China Securities Network on December 14 (Reporter Haichun Wang): None of the three resolutions regarding the extension of Vanke's RMB 2 billion bond were passed.
Shanghai Pudong Development Bank announced the resolution of the first bondholders' meeting for the fourth tranche of medium-term notes issued by Vanke Enterprise Co., Ltd. in 2022, held on December 13, 2025.
According to the information disclosed, as of the record date on December 9, 2025, there were a total of 20 institutional holders or their agents for the 22 Vanke MTN004. Eighteen holders or their agents attended the meeting. The effective voting rights represented at the meeting amounted to 19,890,000, accounting for 99.45% of the total voting rights, making the bondholders' meeting valid.
Public data shows that the principal repayment date of this bond is December 15, 2025, with an outstanding balance of 2 billion yuan and an annual interest rate of 3%.
The first proposal at this meeting was to adjust the principal and interest repayment arrangements of the medium-term notes without additional credit enhancement measures. No bondholders supported this proposal, with zero effective voting rights in favor. Sixteen bondholders opposed the proposal, representing 15,340,000 effective voting rights, accounting for 76.70% of the total voting rights, rendering the proposal ineffective.
Proposal 2 involved adding credit enhancement measures acceptable to investors and conditionally adjusting the principal and interest repayment arrangements of the medium-term notes.
The review results showed that seven holders or their agents of 22 Vanke MTN004 supported the proposal, representing 16,680,000 effective voting rights, accounting for 83.40% of the total voting rights. Eleven holders opposed the proposal, representing 3,210,000 effective voting rights, accounting for 16.05% of the total voting rights; the remaining votes were abstained.
According to the regulations of the 'Holders' Meeting Procedures for Non-financial Enterprise Debt Financing Instruments in the Interbank Bond Market' and the terms of the issuance documents for this bond, this proposal required the consent of bondholders holding more than 90% of the total voting rights to take effect. Therefore, Proposal 2 did not pass.
Proposal 3 aimed to adjust the principal and interest repayment arrangements of the medium-term notes and add credit enhancement measures. One holder supported the proposal, representing 3,790,000 effective voting rights, accounting for 18.95% of the total voting rights. Sixteen holders opposed the proposal, representing 15,340,000 effective voting rights, accounting for 76.70% of the total voting rights. As the proportion of approval votes did not exceed 90%, this proposal also failed to pass.
It is understood that if Vanke fails to repay the principal or interest of the debt financing instrument in full and on time, it will have a grace period of five working days.
Industry insiders believe that investors will engage in negotiations with Vanke during this grace period. Whether Vanke will optimize or revise the extension plan to achieve the extension target remains to be observed.
It is worth noting that in early December, rating agency Fitch placed Vanke on its Negative Rating Watch list, stating that the company faces liquidity constraints and may not have sufficient liquidity to repay relevant bonds by their originally scheduled maturity dates.
Fitch pointed out that Vanke's available cash decreased from RMB 69 billion as of June 30, 2025, to RMB 60 billion as of September 30, 2025, with the majority of the cash tied up in advance-sale escrow accounts. Meanwhile, the company faces a significant amount of maturing debt, including nearly RMB 6 billion in capital market debt due in December 2025 and an additional approximately RMB 12 billion maturing in 2026.
"In our view, without shareholder support, Vanke may be unable to repay this debt." Fitch expects that even after taking into account proceeds from asset disposals, Vanke’s free cash flow (FCF) for 2025 and 2026 may remain negative. As such, the agency believes there are clear signs of increasing debt risks for Vanke.
Analysts believe that the core issue behind Vanke's current debt pressure lies in the fact that while declining market sales are placing strain on the company’s cash inflows, it also faces multiple pressures, including "concentrated short-term debt repayments" and "tightening financing channels."
Yan Yuejin, Deputy Director of the Yiju Research Institute, noted that as of November 2025, Vanke has RMB 18.2 billion in principal and interest repayments due within one year on domestic bonds, of which RMB 5.7 billion is due in December. However, Shenzhen Metro Group, under the framework agreement, has only RMB 2.29 billion remaining in available credit, leaving a funding gap exceeding 60% for the period. Although the company managed to generate cash inflows through sales receipts and asset disposals during the first three quarters, the industry downturn caused its development business revenue to decline by 32.45% year-on-year, raising doubts about whether operating cash flow can remain positive.
"After Moody's and other institutions downgraded its ratings, Vanke's new financing costs have risen to 3.58%, and market confidence in the real estate sector has yet to fully recover, obstructing equity financing and bond issuance channels. Moreover, Shenzhen Metro Group incurred a massive loss of RMB 33.46 billion due to Vanke's losses, weakening its ability to provide further support and further narrowing Vanke’s external assistance options," Yan Yuejin stated.
Li Yujia, Chief Researcher at the Housing Policy Research Center of Guangdong Province's Urban-Rural Planning Institute, believes that the real estate market is still in a downward trend, inevitably affecting corporate sales receipts and weakening developers' self-sustaining 'cash generation' capabilities.
"If the goal is to maintain stability for both the company and the market, external financial support or intervention is needed at this time. Through joint efforts from multiple parties, short-term funding pressures could be alleviated, for instance, by extending maturities to ease cash flow strains and providing companies with some room to maneuver," Li Yujia remarked.
Editor/KOKO
