China Vanke Shares Fall After Bondholders Reject Debt Extension Proposal

By Jiahui Huang

China Vanke's shares fell sharply after its bondholders rejected a proposal to extend a bond payment, fueling fears that authorities may not offer support to keep the developer afloat.

The company's shares fell 3.8% in Hong Kong to 3.54 Hong Kong dollars as of midday Monday, equivalent to 45 U.S. cents, while its Shenzhen-listed shares fell 2.2% to 4.91 yuan.

The property developer said early Monday that it failed to secure bondholder support for a one-year extension of a bond payment due Monday.

Vanke, one of China's largest real estate companies, said its three proposals to extend bond payments were rejected. The proposal to extend principal and interest payments was rejected, with 76.7% of holders rejecting it. Two other proposals that included credit-enhancement measures won some backing but all three were short of the over 90% threshold support needed.

"It's a sign that the Chinese government may have decided to give up on rescuing Vanke," Daiwa analyst William Wu said, adding that the outcome has been priced in by markets.

A lot of Vanke's bondholders are state-owned, Wu said, adding that the developer's largest shareholder, Shenzhen Metro, also faces cash flow pressures.

The three-day vote ended Friday, with Vanke given a grace period of five working days to pay 2 billion yuan, equivalent to US$283.5 million, on the onshore bond, according to a filing on Monday to the National Association of Financial Market Institutional Investors.

Vanke said Monday that it will hold a bondholder meeting on Thursday to discuss next steps for the 2 billion yuan note.

Vanke's bondholders may demand more credit enhancement or earlier repayment of some principal for the bonds due Dec. 15, said Morningstar analyst Jeff Zhang. That is close to being approved, "so we are hopeful that a deal could be reached in the next five days," Zhang said.

The developer had been the outlier among its privately owned peers that have undergone restructuring or liquidation since the yearslong downturn in China's property sector began. It had managed to stay afloat with the support of state-owned Shenzhen Metro.

In early November, Vanke said it could borrow up to 22 billion yuan from Shenzhen Metro before June 30, 2026, with 2.29 billion yuan still available for withdrawal.

Industry watchers have long viewed Vanke as a barometer of how much pain Chinese authorities could tolerate amid the real-estate slump.

However, officials' stance toward the property sector seemed to have cooled somewhat following the implementation of stimulus last year, while stronger-than-expected exports have supported the economy's around 5% growth target.

"Policymakers have this year pivoted back to a relatively cool stance towards the sector, even downgrading property from a growth driver to a livelihood issue in their 'recommendations' for the next five-year plan," Gavekal Dragonomics analyst Xiaoxi Zhang wrote in a recent note.

Vanke's bondholders rejecting its proposal isn't necessarily a bad thing for the property sector, Daiwa's Wu said.

"In the medium term, it may remind policymakers that the property sector still needs some kind of policy support," he added.

Write to Jiahui Huang at jiahui.huang@wsj.com

By Jiahui Huang

China Vanke's shares fell sharply after its bondholders rejected a proposal to extend a bond payment, fueling fears that authorities may not offer support to keep the developer afloat.

The company's shares fell 3.8% in Hong Kong to 3.54 Hong Kong dollars as of midday Monday, equivalent to 45 U.S. cents, while its Shenzhen-listed shares fell 2.2% to 4.91 yuan.

The property developer said early Monday that it failed to secure bondholder support for a one-year extension of a bond payment due Monday.

Vanke, one of China's largest real estate companies, said its three proposals to extend bond payments were rejected. The proposal to extend principal and interest payments was rejected, with 76.7% of holders rejecting it. Two other proposals that included credit-enhancement measures won some backing but all three were short of the over 90% threshold support needed.

"It's a sign that the Chinese government may have decided to give up on rescuing Vanke," Daiwa analyst William Wu said, adding that the outcome has been priced in by markets.

A lot of Vanke's bondholders are state-owned, Wu said, adding that the developer's largest shareholder, Shenzhen Metro, also faces cash flow pressures.

The three-day vote ended Friday, with Vanke given a grace period of five working days to pay 2 billion yuan, equivalent to US$283.5 million, on the onshore bond, according to a filing on Monday to the National Association of Financial Market Institutional Investors.

Vanke said Monday that it will hold a bondholder meeting on Thursday to discuss next steps for the 2 billion yuan note.

Vanke's bondholders may demand more credit enhancement or earlier repayment of some principal for the bonds due Dec. 15, said Morningstar analyst Jeff Zhang. That is close to being approved, "so we are hopeful that a deal could be reached in the next five days," Zhang said.

The developer had been the outlier among its privately owned peers that have undergone restructuring or liquidation since the yearslong downturn in China's property sector began. It had managed to stay afloat with the support of state-owned Shenzhen Metro.

In early November, Vanke said it could borrow up to 22 billion yuan from Shenzhen Metro before June 30, 2026, with 2.29 billion yuan still available for withdrawal.

Industry watchers have long viewed Vanke as a barometer of how much pain Chinese authorities could tolerate amid the real-estate slump.

However, officials' stance toward the property sector seemed to have cooled somewhat following the implementation of stimulus last year, while stronger-than-expected exports have supported the economy's around 5% growth target.

"Policymakers have this year pivoted back to a relatively cool stance towards the sector, even downgrading property from a growth driver to a livelihood issue in their 'recommendations' for the next five-year plan," Gavekal Dragonomics analyst Xiaoxi Zhang wrote in a recent note.

Vanke's bondholders rejecting its proposal isn't necessarily a bad thing for the property sector, Daiwa's Wu said.

"In the medium term, it may remind policymakers that the property sector still needs some kind of policy support," he added.

Write to Jiahui Huang at jiahui.huang@wsj.com

Asian stocks tumbled in early trading on Monday as investors reined in risk-taking at the start of a week sprinkled with central bank decisions and data releases.

MSCI's broadest index of Asia-Pacific shares outside Japan, opens new tab was down 0.6%, led by a drop of as much as 2.7% in South Korean shares, opens new tab, one of the world's best-performing markets this year.

"We roll into the final week of trading for 2025 before many square off their books and call it a year," said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne. "Some will have already done so," he added.

"One suspects liquidity conditions will thin out this week from what is typical, but remain sufficient for size to be worked without excessively moving prices, but will then really drop next week."

S&P 500 e-mini futures were up 0.1%, while the yield on the U.S. 10-year Treasury bond held steady at 4.184%, as investors awaited a string of economic data releases and a slew of decisions from central banks.

Among the central banks making decisions this week, the Bank of Japan is expected to hike rates by 25 basis points to 0.75%, while the Bank of England may make an equal-sized cut to 3.75%. The European Central Bank is expected to keep interest rates on hold, alongside Sweden's Riksbank and Norway's Norges Bank.

Investors will also have the chance to check in on a host of economic data that were delayed by the U.S. government shutdown, including the jobs report for November and the monthly consumer price index.

In Japan, stocks clung to gains with the Topix (.TOPX), opens new tab steady after the BOJ's closely-watched "tankan" survey showed on Monday that big manufacturers' business sentiment hit a four-year high, suggesting the economy was weathering the hit from higher U.S. tariffs.

Against the Chinese yuan trading offshore , the U.S. dollar was holding steady at 7.0532 yuan, hovering around its strongest level in more than a year ahead of house price and activity data for November due for release later today.

On Friday, stricken state-backed property developer China Vanke, opens new tab failed to secure bondholder approval to extend by one year a bond payment due on Monday, a filing showed, increasing the risk of default and renewing concerns about the crisis-hit property sector.

In commodities, Brent crude was 0.3% higher at $61.30 after Imperial Oil, opens new tab said on Sunday it had issued a fire alert at its 120,000 barrel-per-day refinery facility in Ontario, Canada. Meanwhile, Russia said that an oil refinery in Afipsky was undamaged by a Ukrainian drone attack.

On the geopolitical front, U.S. envoy Steve Witkoff said "a lot of progress was made" in peace talks to end the Ukraine war in Berlin on Sunday.

Gold fluctuated between gains and losses after a four-day rally last week that saw it approach its record high of $4,381.21. Spot bullion prices were down 0.1% at $4,299.69.

Cryptocurrency markets remained under pressure for a fourth consecutive day, with bitcoin last down 0.3% at $88,235.59 and ether = 0.5% lower at $3,065.62.

By Kimberley Kao

China Vanke failed to secure bondholder support for a one-year extension of a bond payment due Monday, as debt continues to plague the Chinese property sector.

The three-day vote ended on Friday, with the developer given a grace period of five working days to pay 2 billion yuan, the equivalent to $283.5 million, on the onshore bond, according to a filing on Monday to the National Association of Financial Market Institutional Investors.

The proposal to extend principal and interest payments was rejected, with 76.7% of holders rejecting it. Two other proposals that included credit enhancement measures won some backing but all three were short of the over 90% threshold support needed.

Write to Kimberley Kao at kimberley.kao@wsj.com

By Kimberley Kao

China Vanke failed to secure bondholder support for a one-year extension of a bond payment due Monday, as debt continues to plague the Chinese property sector.

The three-day vote ended on Friday, with the developer given a grace period of five working days to pay 2 billion yuan, the equivalent to $283.5 million, on the onshore bond, according to a filing on Monday to the National Association of Financial Market Institutional Investors.

The proposal to extend principal and interest payments was rejected, with 76.7% of holders rejecting it. Two other proposals that included credit enhancement measures won some backing but all three were short of the over 90% threshold support needed.

Write to Kimberley Kao at kimberley.kao@wsj.com

By Kimberley Kao

China Vanke failed to secure bondholder support for a one-year extension of a bond payment due Monday, as debt continues to plague the Chinese property sector.

The three-day vote ended on Friday, with the developer given a grace period of five working days to pay 2 billion yuan, the equivalent to $283.5 million, on the onshore bond, according to a filing on Monday to the National Association of Financial Market Institutional Investors.

The proposal to extend principal and interest payments was rejected, with 76.7% of holders rejecting it. Two other proposals that included credit enhancement measures won some backing but all three were short of the over 90% threshold support needed.

Write to Kimberley Kao at kimberley.kao@wsj.com