On December 26, Vanke Corporation (Vanke), a Chinese real estate company, had their 37 billion yuan (RMB, Renminbi) mid-term note extension proposal rejected by creditors. This came shortly after another 20 billion yuan debt extension proposal by Vanke was also turned down on December 23.
According to a notice released by Vanke on December 27, in response to the rejection of the MTN005 extension proposal, a total of 29 opposing holders or their representatives holding 35,820,000 votes (equal to 96.81% of the total voting rights) led to the failure of the resolution for the MTN005 bondholder meeting.
The MTN005 bond was originally scheduled to mature on December 28, 2025, with a remaining balance of 37 billion yuan and an interest rate of 3.00%. Vanke’s proposed extension plan aimed to postpone the principal repayment deadline by 12 months to December 28, 2026, along with a corresponding extension of interest payments without compounding, at the same 3.00% interest rate.
Despite the rejection of the debt extension proposal, Vanke managed to secure an extension of the grace period. The company announced an extension of the grace period for interest payments within the tenure of the mid-term notes from 5 business days to 30 trading days (until February 10, 2026), allowing more time for necessary financial arrangements to be made.
Earlier on December 23, Vanke faced a similar rejection of a 20 billion yuan debt extension but was granted a 30-day grace period in that instance as well.
As a leading player in the Chinese real estate sector, Vanke has been facing increasing challenges amid the overall downturn of the industry in China, with cash flow becoming a critical issue. Public records show that Vanke has a total of 13 outstanding corporate bonds and medium-term notes within China, amounting to 20.316 billion yuan, with 10 billion yuan of domestic debt maturing between April and July 2026. Vanke’s financial report for the first three quarters of the year indicates a 26.61% year-on-year decrease in revenue to 161.39 billion yuan, leading to a net loss attributable to the company’s shareholders of 17.94 billion yuan, marking a 231.7% decline compared to the same period last year. In the third quarter alone, Vanke reported a net loss of 16.069 billion yuan, down by 98.61% year-on-year.
In a recent research report, renowned multinational investment bank Goldman Sachs suggested that without broader financial support, asset disposals, or refinancing plans, Vanke might have to resort to market-oriented measures for a comprehensive debt restructuring.
Citing sources familiar with the matter, Bloomberg reported on December 12 that Vanke had lost the support of the Chinese Communist Party in November and that a collapse was deemed inevitable.