One yuan bond due May 2028 fell as much as 22% to 23 per 100 face value, prompting an early suspension of trading by the Shenzhen Stock Exchange. Most of the developer’s publicly traded bonds have similar prices.
Vanke has asked holders of a 2 billion yuan ($283 million) bond maturing on December 15 if it can defer both principal and interest payments until the same day next year, three sources told Reuters on Tuesday. The coupon would remain at 3% during the extension, they said.
China Vanke, which is 30% owned by Shenzhen Metro, declined to comment.
The deferral request would be the developer’s first request for an onshore bond. The company marked the extension last week without disclosing how long the delay was asking for. A meeting of bondholders is scheduled for December 10 and the proposal requires the approval of 90% of holders to pass.
Market participants are divided over whether bondholders will approve the plan.
One source said that without collateral and with an immediate, unsecured extension of both principal and interest, the chances of bondholder approval are low.
Another source said that while investors are clearly unhappy with the expansion plan, it could still win approval after stakeholders reach a compromise.
Because the matter is private, the people do not want to be named.
Bloomberg first reported the expansion plan on Monday. ($1 = 7.0740 Chinese Yuan Renminbi).
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