Major bondholders of China's Vanke Co. met with senior regulators in Shenzhen before a pivotal vote on a debt restructuring extension plan. The outcome will determine whether the developer avoids default on over CNY 12 billion in maturing bonds.
- Vanke bondholders met regulators in Shenzhen on December 7, 2025
- CNY 12.3 billion in bonds face extension vote on December 10
- Proposed extension includes 2-year maturity delay and 30% equity conversion option
- CNY 8.7 billion in additional short-term instruments due by March 2026
- Bond yields rose to 18.6% amid default risk concerns
- Failure could trigger default across 40+ financial institutions
Vanke Co. bondholders gathered in Shenzhen on December 7, 2025, with oversight officials from China’s Ministry of Finance and the People’s Bank of China to discuss the proposed extension of a debt restructuring agreement. The meeting comes ahead of a formal vote scheduled for December 10, 2025, on whether to extend the maturity of CNY 12.3 billion in outstanding bonds originally due in 2026. The extension would delay principal repayment by two years, with revised interest terms and equity-linked conversion options for a portion of the debt. The restructuring plan, which emerged after Vanke reported a 47% drop in net profit for the first half of 2025, aims to stabilize liquidity amid a protracted property market downturn. Out of 18 bond tranches under review, 12 are facing maturation within the next 18 months, with an additional CNY 8.7 billion in short-term financing instruments due by March 2026. The government's involvement signals growing concern over systemic risks in China’s real estate sector, particularly for developers with significant exposure to off-plan sales and high leverage. If the extension is approved, bondholders would receive a 5% reduction in coupon rates and the option to convert 30% of the principal into Vanke shares at a 20% discount to current market prices. Failure to secure approval could trigger a default event, leading to immediate legal enforcement actions by creditors and potential cascading effects across the shadow banking system. Market analysts estimate that a default would affect over 40 financial institutions, including major state-owned banks and trust companies. Investors are closely watching the outcome, with Vanke’s corporate bond yields rising to 18.6% in early December, a 320 basis point increase from the prior month. The company’s share price has declined 14% since the announcement of the restructuring proposal. The vote’s result will likely influence credit conditions for other distressed developers, including Country Garden and Sunac China, which are also negotiating similar arrangements.