Vanke's 5.7 billion medium-term note holder meeting proposal is out: it includes four repayment plans, with a maximum proposed repayment of 40% of the principal, scheduled for repayment on January 28

On January 15, the official website of the National Association of Financial Market Institutional Investors of China disclosed two announcements. Shanghai Pudong Development Bank Co., Ltd. and Bank of Communications Co., Ltd. acted as conveners to release the summary of proposals for the first bondholders' meeting of Vanke Co., Ltd.'s 2022 fourth phase "22 Vanke MTN004" and fifth phase "22 Vanke MTN005" medium-term notes, with a total scale of 5.7 billion yuan.

This time, both bondholders' meetings have reset four special proposals, including principal extension, grace period extension, partial early redemption of principal and interest, and provision of credit enhancement measures. All proposals must be approved by holders with more than 90% of voting rights to take effect, with the voting deadline set for January 26, 2026.

Public information shows that the "22 Vanke MTN004" bond has a balance of 2 billion yuan, a coupon rate of 3.00%, with the original maturity date set for December 15, 2025, and interest payable of 60 million yuan; the "22 Vanke MTN005" bond has a balance of 3.7 billion yuan, also with a coupon rate of 3.00%, and the original maturity date is December 28, 2025, with interest payable of 111 million yuan. Both bonds are seeking extension of repayment.

According to the latest disclosed proposals, both bond proposals aim to adjust the repayment arrangements for the medium-term notes' principal and interest. The proposal suggests adjustments to the principal and interest repayment of the two medium-term notes, while providing the project company's receivables pledge as credit enhancement.

Among them, the "22 Vanke MTN004" bond intends to extend the principal repayment time by 12 months to December 15, 2026; the "22 Vanke MTN005" will be extended to December 28, 2026, with the coupon rate remaining at 3.00% during the extension period, and the new interest will be paid together with the principal.

Regarding unpaid interest, the 60 million yuan of "22 Vanke MTN004" must be paid by January 28, 2026, and the 111 million yuan of "22 Vanke MTN005" must be paid by February 10, 2026. The unpaid principal during the grace period will accrue interest at 3.00%, and unpaid interest will not accrue compound interest.

As a credit enhancement guarantee, Vanke promises to use the receivables of its project companies as collateral. Among them, the "22 Vanke MTN004" involves three companies: Shenzhen Rongxing Real Estate Development Co., Ltd., Langfang Wanheng Shengye Real Estate Development Co., Ltd., and Beijing Youtai Real Estate Development Co., Ltd.; the "22 Vanke MTN005" involves Shenzhen Zhongwan Huakai Industrial Investment Co., Ltd., Xi'an Yiheyuan Industrial Co., Ltd., and Shenzhen Wanxin Future City Manufacturing Co., Ltd. Additionally, the guarantee registration must be completed within 60 working days after the proposal is approved, otherwise, creditors may declare the principal and interest immediately due.

The second proposal is to extend the grace period for the medium-term notes. This proposal intends to extend the grace period for the principal and interest repayment dates of the two notes from 30 trading days to 90 trading days. Among them, the grace period expiration date for "22 Vanke MTN004" is April 29, 2026; the grace period for "22 Vanke MTN005" is extended to May 14, 2026. According to the proposal, if Vanke fully repays, eliminates default events, or obtains waivers from the bondholders' meeting during the grace period, it will not constitute a default, and no penalty interest, default penalties, or overdue interest will be imposed during the grace period Unpaid principal will continue to accrue interest at the coupon rate during the grace period, and the actual payment will include the accrued interest, with no additional interest calculated on unpaid interest.

Proposal Three mainly proposes fixed payments and adjustments to the principal and interest payments, while also providing credit enhancement measures and repayment order commitments. Among them, the fixed payment arrangement specifies that if this proposal is approved, Vanke will implement a payment of CNY 100,000 on January 28, 2026, for the accounts of holders who participate in the holder meeting and agree to Proposal Three or Proposal Four. The principal portion will not accrue interest from the original payment date to January 28, 2026; if the principal balance of the holder's account changes compared to the debt registration date, this arrangement will apply based on the lower amount.

On this basis, the principal payment and payment arrangements will also be adjusted. 40% of the principal of the "22 Vanke MTN004" notes (after deducting the fixed payment portion) will be paid on January 28, 2026, with the remaining 60% extended to December 15, 2026; the "22 Vanke MTN005" will have the same proportion paid on January 28, 2026, with the remaining 60% principal extended to December 28, 2026. Unpaid interest and interest during the accrual period for the 40% principal will be paid within January 28, and the interest rate for the extended portion will remain at 3.00%.

In addition, the credit enhancement measures will remain consistent with Proposal One. At the same time, Vanke commits that in subsequent domestic public market credit bond payments, the repayment order will be sorted by the initial maturity date of the bonds, ensuring that the repayment ratio of the medium-term notes is not worse than that of all later-maturing bonds.

Proposal Four is to extend the grace period for the medium-term notes and the payment of part of the principal and interest. This proposal suggests extending the original grace period of 30 trading days to 90 trading days, while setting up two payment arrangements: one is a fixed payment, consistent with Proposal Three; the other is a partial principal and interest payment, where the interest payable on both bonds will be paid on January 28, 2026, and 5% of the principal balance after deducting the fixed payment will also be paid on the same day, with this portion of the principal no longer accruing interest, and unpaid principal during the grace period will accrue interest at 3.00%.

During the grace period, if Vanke makes full payment or obtains a waiver during the grace period, it will not constitute a default. Vanke also commits to maintaining the repayment priority of this medium-term note, ensuring it is not worse than later-maturing credit bonds.

According to the announcement, the bondholder meeting for the "22 Vanke MTN004" will be held on January 21, 2026, at 10:00, and the bondholder meeting for the "22 Vanke MTN005" will be held on the same day at 15:00, with the voting deadline for the holder meetings set for January 26.

Source: The Paper