From "Zero Support" to "High Votes Against"
On December 14, the results of the first bondholder meeting for "22 Vanke MTN004" were disclosed, revealing that all three proposed extension plans for this medium-term note were rejected. Notably, one unconditional extension proposal, considered favorable to Vanke, received zero support.
Vanke's repayment window is now highly urgent, as the bond's original maturity date is December 15. However, according to the bond's prospectus, if payment is not completed by then, the issuer may enter a five-business-day grace period but must pay interest at a rate 5 basis points higher than the coupon rate.
Industry analysts suggest this rejection casts a shadow over Vanke's negotiations for extending another 3.7 billion yuan in bonds due later this year and may further heighten market expectations for a potential debt restructuring.
All Three Extension Plans Rejected
The three extension proposals for "22 Vanke MTN004" were all voted down. The first proposal, which extended the principal repayment by 12 months to December 15, 2026, without additional costs to Vanke during the extension period, was seen as favorable to the issuer. However, it received zero votes in favor, with 16 bondholders opposing it, representing 76.70% of the voting rights.
The second proposal, which required normal interest payment before the extension and additional credit enhancement measures acceptable to investors, garnered 83.40% support but still fell short of the 90% threshold needed for approval.
The third proposal, similar to the second but with less stringent credit enhancement requirements, was also rejected, with 76.70% of voting rights opposing it.
According to the bond's prospectus, amendments to repayment terms require approval from over 50% of attending bondholders, with at least 90% in favor. Thus, none of the proposals passed.
Behind-the-Scenes Negotiations
The voting outcome followed weeks of negotiations. Market sources indicated that some bondholders met with financial and state asset regulators last weekend, expressing concerns about potential defaults. At least three bondholders reportedly informed Vanke they would vote against the extension, though this remains unconfirmed.
Some creditors reportedly fear that agreeing to an extension could lead to undervaluation or non-market-based disposal of Vanke's assets, potentially resulting in state asset losses. In the current market environment, a public extension request by a property developer is already viewed as a significant credit event, with reputational and refinancing impacts akin to an actual default. Some creditors thus prefer pushing for judicial proceedings under default protocols.
What Comes Next?
With all three extension plans rejected, market attention turns to Vanke's next steps. Earlier reports suggested that if the extension proposal failed, Vanke might use the five-day grace period mentioned in the bond's prospectus to continue negotiations with investors. As of press time, Vanke has not responded to inquiries.
The grace period would extend the repayment deadline to December 20, with interest calculated at the coupon rate plus 5 basis points.
Creditor Composition and Risk Assessment
No official details on "22 Vanke MTN004" bondholders have been disclosed, but industry sources indicate banks hold over 85%, while public and private funds hold more than 10%. Overall, Vanke's onshore bonds are primarily held by banks, with minimal exposure from public funds.
Sun Binbin, Chief Economist at Caitong Securities Research Institute, noted that Vanke's bond holdings are dominated by large banks and wealth management firms with strong risk resilience, suggesting limited market impact in case of default.
Data from Enterprise Early Warning shows institutional investors, including funds, have significantly reduced holdings of Vanke's onshore bonds. The current major holders are bank wealth management subsidiaries, with total holdings of approximately 109 million yuan, a notable decline from previous levels.
Sun believes Vanke's relatively small bond volume and limited public fund exposure mean any default impact would be manageable.
Rising Restructuring Risks
The rejection of the extension plans could affect Vanke's other maturing bonds. Another bond, "22 Vanke MTN005," with a balance of 3.7 billion yuan, is also seeking an extension. Industry experts warn that the failed vote weakens negotiation leverage, potentially leading creditors to demand higher risk premiums or stricter credit enhancements.
By the end of November 2025, Vanke had repaid 19.571 billion yuan in onshore public debt. It currently has 13 outstanding onshore bonds totaling 20.316 billion yuan, with 10 billion yuan due between April and July 2026.
Offshore, Vanke has two outstanding dollar bonds: VNKRLE 3.975 11/09/27 and VNKRLE 3.5 11/12/29, with balances of $300 million and $1 billion, respectively.
Market rumors suggest PJT Partners is contacting Vanke's dollar bondholders to form a group for debt management discussions, though this remains unconfirmed.
Goldman Sachs noted in a recent report that over 20 developers have had debt restructuring plans approved since 2022, with cumulative restructured debt exceeding 1.2 trillion yuan by October 2025. Without broader financial support, asset sales, or refinancing plans, Vanke may need to pursue a comprehensive market-based debt restructuring.
Chen Linghua, an analyst at S&P Global Ratings, stated in an email that Vanke faces a bond maturity wave of approximately 11.4 billion yuan between December 2025 and May 2026. The risk of distress restructuring has risen in the next six months due to weak liquidity and unsustainable financial commitments.
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