China Vanke Seeks Extension for Second 3.7 Billion Yuan Medium-Term Note

2025.12.18

China Vanke is set to negotiate an extension for another medium-term note.

On the evening of December 17, Bank of Communications, as the convener, disclosed six proposals for the first bondholders' meeting regarding the "22 Vanke MTN005." The first five proposals outline the extension plan for this medium-term note. According to the disclosure, the note has a principal maturity date of December 28, 2025, with an outstanding balance of 3.7 billion yuan and a coupon rate of 3%.

Key details of the proposals: - **Proposal 1** suggests extending both principal and interest payments by 12 months, adjusting the repayment date to December 28, 2026, with no compound interest during the extension period. The coupon rate remains at 3%, and additional interest will be paid alongside the principal. This adjustment does not constitute a default. - **Proposals 2–5** maintain the 12-month principal extension and interest payment arrangements. They require the payment of 111 million yuan in accrued interest on the original due date (December 28, 2025) and introduce additional credit enhancement measures. Some proposals include further conditions. - **Proposal 2** requires the issuer to provide corresponding credit enhancements. - **Proposals 3–5** explicitly demand acceptable credit enhancements for the principal and extended interest, such as an irrevocable joint liability guarantee from Shenzhen Metro Group or other major Shenzhen state-owned enterprises, or other collateral measures. - **Proposal 4** stipulates that Vanke must fully repay the outstanding principal and interest of this note before settling subsequent bond maturities. - **Proposal 5** further clarifies that Vanke must prioritize full repayment of this note before addressing other bonds maturing after December 28, 2025. It also includes cross-default clauses, triggering immediate repayment if Vanke fails to meet obligations on other debts.

For approval, each proposal requires the consent of bondholders holding over 90% of the voting rights—a high threshold.

Additionally, **Proposal 6** extends the grace period for principal and interest payments from 5 working days to 30 trading days. If payments are made within this period, it will not be deemed a default, and no penalties or additional interest will apply.

Industry experts note that extending grace periods is a common practice to improve approval odds. If extension proposals fail, issuers may explore alternatives like partial repayments, redemption mechanisms, or offering consent fees.

Meanwhile, Vanke faces significant upcoming debt maturities. As of December 3, 2025, its outstanding domestic bonds total 20.3 billion yuan, with 3.7 billion yuan due this year, 10 billion yuan in 2026, and 2.366 billion yuan entering call options. Overseas, it has two bonds totaling $1.3 billion, maturing in November 2027 and 2029, both with cross-default clauses.

Vanke is also seeking external support, reportedly requesting some commercial banks to defer interest payments on specific loans for a year. On December 17, it announced that China Huaxia Bank agreed to extend a 200 million yuan loan guarantee for its subsidiary Shenzhen Poyu by one year, with existing collateral arrangements unchanged.