China Vanke has secured an agreement with domestic lenders, including Bank of China, to postpone its loan interest payments until September, according to two people familiar with the matter. The new arrangement grants the state-backed developer some much-needed breathing space as it struggles to avert default amid an ongoing property sector crisis.
Under the terms of the deal, Vanke will be permitted to switch from quarterly to annual interest payments, and all interest due in the coming months will be deferred until September, the sources said. This follows Vanke’s missed quarterly interest payment last month, the sources added.
The revised payment schedule gives Vanke, once China’s top property developer by sales, additional time to manage repayments across a range of debt instruments, with over CNY 13 billion in bond maturities falling due within the first half of the year.
The agreement highlights efforts by both the local government and the financial sector to stabilize Vanke and prevent broader default risks that could impact China’s property and banking industries. Vanke is also in talks with holders of three domestic bonds to postpone their payments, amid widespread concerns over the systemic fallout from another major developer failure.
The Chinese property sector, which previously accounted for about a quarter of the nation’s GDP, has faced a severe liquidity crunch since 2021, pushing several leading developers including China Evergrande Group and Country Garden into default and damaging homebuyer confidence and the overall economy.
