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Bond Market News
China Vanke Repays Dollar Bond, Receives $215mn Loan; Downgraded to CCC+ by Fitch
May 15, 2025
China Vanke has addressed an immediate financial obligation by repaying its only dollar bond due this year. This repayment, totaling $423mn, is considered to be a signal of a reduction in liquidity risks following government intervention in late-January. In a latest update regarding the developer, Vanke has also secured a new loan amounting to RMB 1.55bn ($215.4mn) from Shenzhen Metro Group to further manage its financial situation. This loan from its largest shareholder is intended to help Vanke cover principal and interest repayments. The loan has a 3Y tenor with an annual interest rate of 2.34%, and may be extended or can be repaid early upon mutual agreement.
However, the positive update occurs against a backdrop of financial concerns. Yesterday, Fitch downgraded China Vanke to CCC+ from B-, citing weaker-than-expected sales, slow cash flow generation in Q1, and a high amount of outstanding debt. Fitch noted that these factors have reduced Vanke’s liquidity buffer. The agency also downgraded Vanke’s Hong Kong subsidiary, Vanke Real Estate (Hong Kong) Company Ltd (Vanke HK), to CCC from CCC+.
Vanke’s dollar bonds have trended higher this week- for instance its 3.5% 2029s are up over 4 points, currently trading at 73.8 cents on the dollar, yielding 11.1%.
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