Chinese insurers sound the alarm over Vanke debt risks after property giant’s bonds, shares tumble on repayment concerns
- Vanke shares closed down 7.1 per cent in Hong Kong on Monday, at their lowest level ever, and fell 4.7 per cent in Shenzhen, their biggest drop since December 2022
- Vanke is the latest developer to face scrutiny from investors and creditors, following defaults by Country Garden and China Evergrande
At least two Beijing-based insurers that farmed out annuity investments late last week told their external portfolio managers to closely monitor Vanke’s credit risks. One life insurer also told its pension managers to curb exposure.
Meanwhile, Vanke, China’s second-biggest developer by sales, started a new round of negotiations with state insurers to extend maturities of some private borrowings.
Vanke shares closed down 7.1 per cent in Hong Kong, at their lowest level ever, and fell 4.7 per cent in Shenzhen, their biggest drop since December 2022. Some of Vanke’s yuan bonds also hit their lowest levels, according to Bloomberg-compiled prices, while its 3.975 per cent dollar bond due in 2027 fell by more than 6 cents on the dollar to 47.3 cents.
Monday’s declines across the board were fuelled by recent reports that the company is negotiating with lenders to delay payments, the latest cause of concern for its repayment abilities. In December, at least two state-backed Chinese insurers agreed to give Vanke more room on private debt payment, Bloomberg reported.
