Vanke paid off this year's USD bonds in one go

Author | Cao Anxun

Editor | Zhou Zhiyu

After obtaining a 20 billion yuan consortium loan, Vanke's liquidity pressure has been rapidly reduced.

On June 5th, Vanke A announced that it will fully pay off the principal and interest of a medium-term note due on June 7th, totaling 612.6 million US dollars. Currently, the 612.6 million US dollars have been remitted to the overseas bank account of Vanke Property (Hong Kong) Limited and will be deposited into the bank account designated by the agent on June 6th.

It is worth mentioning that according to WIND data, this US dollar bond is the largest bond due within the year for Vanke. After repaying this US dollar bond, Vanke has no more US dollar bonds due within the year, and the major debt repayment hurdle for the year has been crossed.

This also echoes Vanke's President Zhu Jiusheng's statement at the performance meeting, "Excluding presale regulatory funds, in 2024, the company may face pressure in debt repayment, but we will definitely overcome this hurdle."

Of course, more crucially, Vanke is not only pursuing safety this year, but also long-term steady development.

According to Vanke's previously announced plan, Vanke hopes to reduce interest-bearing debt by over 100 billion yuan in the next two years, and reduce the total scale of interest-bearing debt by more than half in the next five years.

To achieve this, Vanke has proposed a comprehensive "slimming and strengthening" plan, including adjusting financing methods. Financial institutions have given Vanke a 1-3 year conversion period, aiming to complete 20 billion yuan in bulk asset disposals each year, focusing on core businesses, and practicing "subtraction."

In fact, since obtaining the 20 billion yuan consortium loan, Vanke's financing side has continued to improve. From May 31st to the present, Vanke has added two more bank loans totaling 1.7 billion yuan.

According to incomplete statistics, in the past month, Vanke has obtained over 30 billion yuan in financing, involving bank loans and CMBS.

In addition, Vanke is alleviating cash flow tightness through asset disposals, issuing REITs, and other means. Recently, it transferred the Shenzhen Bay Super Total Land to the major shareholder Shenzhen Metro Group, bringing in 2.235 billion yuan.

Vanke stated that this transaction is one of the decisive measures to implement the comprehensive "slimming and strengthening" plan. Through this transaction, it will help reduce the occupation of funds by non-core assets, focus on and strengthen the three major core businesses. Shenzhen Metro's participation in the project's land use rights auction reflects the strong support of the major shareholder for Vanke in a market-oriented and legal manner.

Industry analysts believe that shortly after announcing the "slimming and strengthening" plan, Vanke quickly completed the asset transaction, demonstrating its firm determination to slim down. Selling non-core assets and quickly recovering funds is a wiser choice at this stage, and it can better help Vanke respond to market changes and its own strategic adjustments.

At the same time, there are signs of recovery in Vanke's sales side. In May, Vanke achieved a total sales volume of 23.33 billion yuan, a 12% increase month-on-month. In the first five months, Vanke achieved a total sales volume of 101.37 billion yuan, ranking third in the industry, behind only Poly Developments and China Overseas Land & Investment.

Zheng Securities stated that Vanke's acquisition of a 20 billion yuan consortium loan reflects the market's full recognition and confidence in Vanke, and also accelerates the company's credit repair. At the same time, the company's sales remain in the top tier, actively depleting inventory, accelerating receipts, coupled with multi-faceted support on the financing side, liquidity is expected to continue to improve With significant progress on the financing side and the introduction of new real estate policies, Vanke has also weathered the storm and is now waiting for a sustained improvement on the sales side to revitalize its own blood-making ability. Vanke will officially enter the second half of the new world, opening a new chapter in its development