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Bond Market News
Vanke Readies Funds for March Dollar Bond; China Refines Sector’s Policies
March 6, 2024
China Vanke said that it has prepared funds to repay its $630mn 5.35% dollar bond due March 11, with the bond trading at 99.25. This comes just after reports emerged earlier yesterday that the developer was facing debt struggles given its supposed negotiations with lenders to delay payments. A source told Reuters that insurers like Taikang Insurance, state-owned PICC Property and Casualty Co and New China Life Insurance have received requests from Vanke for debt extensions. Vanke is China’s second largest property developer by sales and Moody’s downgraded some of Vanke’s bonds to “junk” (Ba1) in November. Reuters notes that if another major rating agency follows suit, those bonds could be dumped out of some of the world’s most important investment indexes. Its dollar bonds sank by over 5-6 points yesterday and continue to inch lower in trade today. While its dollar bond due next week trades near par, its $600mn 4.2% bond due June 2024 currently trades at 87.75 cents on the dollar.
Separately, a work report to the National People’s Congress noted that China had outlined proposals to provide support to the ailing real estate sector. The government pledged to boost financing for private businesses via increasing loans and expanding the scale of bond issuances for them. The government has also promised to tighten the management of presale funds from housing projects under construction.
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