China Vanke bondholders approve grace period, reject delay
China Vanke bondholders have approved a short-term grace period extension for a 3.7 billion yuan ($528 million) bond but rejected a proposal to delay repayment by a full year, according to a filing on December 26.
The bond, set to mature on December 28, will now have a 30-trading-day grace period instead of the original five days. This decision follows a similar vote on another Vanke note worth 2 billion yuan, where bondholders also approved a grace period extension but rejected a one-year delay. These approvals allowed the state-backed developer to narrowly avoid default, News.Az reports, citing Reuters.
Credit ratings impact:
S&P Global Ratings downgraded Vanke to ‘SD’ (selective default), viewing the grace-period extension as a distressed-debt restructuring.
Fitch Ratings moved Vanke to ‘RD’ (restricted default) from "C".
China Vanke still faces 9.4 billion yuan in bonds maturing by May 2026, raising concerns about the property market, which has struggled since the 2021 debt crisis. Analysts expect Vanke may seek multiple short-term extensions before proposing a broader debt restructuring, testing how much local governments are willing to intervene to prevent defaults.
The grace period extension received 92.11% approval, surpassing the 90% threshold needed for passage.
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