China Vanke, historically the largest and best-managed Chinese real estate developer, is facing significant financial distress, with $15 billion of market capitalization against $240 billion of debt. Market reactions suggest a deepening concern over its debt situation, where a 7% loss on assets could render the company insolvent. Despite its strong management reputation, Vanke's June 24 bond yields have soared to 36%, indicating market skepticism about the company's ability to meet its obligations. This concern was exacerbated when Vanke's onshore bond '22 Vanke 05' rebounded by 25% after New China Asset Management denied rumors about negotiating an extension on 10 billion yuan in non-standard debt. However, the company's shares dropped around 5% in both mainland China and Hong Kong. Additionally, Vanke's '21Vanke04', a 3.7% 2026-due onshore bond, experienced a 20.5% tumble, leading to a trading halt, while a 3.5% 2029-due dollar bond fell by 5.3 cents to 39.6 cents, marking the most significant decline in a year.
'21Vanke04', a 3.7% 2026-due onshore bond of China #Vanke, tumbled by 20.5% and triggered a trading halt in the afternoon session. A Vanke 3.5% 2029-due dollar bond drops by 5.3 cents to 39.6 cents, the most decline in a year. https://t.co/wI1DroWnh6
Shares and bonds of China Vanke, the country’s second-biggest property developer by sales, extend a sell off Monday on renewed concerns about the builder’s debt https://t.co/sxwvIOtWGK
⚡Vanke's onshore bond '22 Vanke 05' rebounded by 25% on Monday after New China Asset denied the rumor that Vanke was negotiating with the asset manager for an extension on 10 billion yuan in non-standard debt. Vanke's shares drop around 5% in mainland and HK. https://t.co/eKDEtZga33
This is what happens when you have $15b of market cap on $240b of debt. Eventually people do the math and go… wait a second if Vanke takes a 7% loss on their assets….this company is insolvent. https://t.co/sQcklAb3Xs https://t.co/4FIpUO0SDs
This is what happens when you have $15b of market cal on $240b of debt. Eventually people do the math and go… wait a second if Vanke takes a 7% loss on their assets….this company is insolvent. https://t.co/y8MG8wjMJU https://t.co/4FIpUO0SDs
Got to be mispricing in one of these Vanke has been the largest Chinese real estate developer during most of the past decade, and many would consider it the best managed co in the industry. Its June 24 bond yields 36%, which suggests the market doesn’t believe it would pay. But,… https://t.co/3V1uTbEmdO