Vanke has received support from its major shareholders through market-oriented and legal means, borrowing 28 billion to help it refinance its debt.

Just one week after the Spring Festival, Vanke's major shareholder quickly took action to provide substantial support to Vanke in a market-oriented and legal manner. On the evening of February 10th, Vanke issued a notice titled "Announcement Regarding Shenzhen Metro Group Providing Shareholder Loans and Related Party Transactions to the Company," stating that its largest shareholder, Shenzhen Metro Group, plans to provide shareholder loans to Vanke in the amount of 28 billion yuan. The loan will be used by Vanke to repay its maturing public debts, demonstrating the strong support from the major shareholder. According to the announcement, the loan has a three-year term, and Vanke will provide assets worth up to 40 billion yuan as collateral, with a collateral ratio set at 70%. Initially, the collateral will be provided by the company's shares of ONEWO (02602) worth 40 billion yuan, with the specific number of pledged shares determined based on the average price of the last 30 trading days as of February 7th, approximately 20.54 Hong Kong dollars per share. In terms of safeguard measures against stock price fluctuations, the initial collateral value is calculated as 40 billion yuan divided by the shareholder loan balance of 28 billion yuan, resulting in a ratio of 142.86%. During the existence of the shareholder loan, the value of the pledged shares will be continuously monitored based on the average price of the last 30 trading days and the latest price, with an alert line set no lower than 130% and a closing line no lower than 100%. Financial analysts believe that the loan arrangement by Shenzhen Metro Group follows market-oriented principles and provides maximum support to Vanke. First, the loan interest rate is low, benchmarked against the 1-year loan market quoted interest rate (LPR) published by the National Interbank Funding Center, with a floating spread of minus 76 basis points, currently at 2.34%. Second, the collateral ratio is high, as the usual collateral ratio for stock pledge financing is between 30% and 60%, while the collateral ratio for this shareholder loan is 70%. Vanke stated that the shareholder loan will help meet the company's funding needs, with the loan interest rate lower than the financing rates from financial institutions and the collateral ratio higher than market standards, demonstrating the strong support from the major shareholder. Financial analysts believe that just before the Spring Festival, many parties expressed their support for Vanke's stable development, and just one week after the festival, the major shareholder swiftly took substantive actions to inject liquidity into Vanke through shareholder loans, once again demonstrating their firm commitment to supporting Vanke's healthy development and providing the market with reassurance. In fact, as a major shareholder of Vanke, Shenzhen Metro Group has been actively assisting Vanke in addressing risks. In 2024, Shenzhen Metro Group subscribed to 29.75% of the shares of Zhongjin Yinli Public Fund and acquired land parcels for Vanke's Shenzhen Bay Super Headquarters. In January of this year, it once again acquired a 49% investment income right of Vanke's Red Bay Property Development Project. Furthermore, in January, Shenzhen Metro Group stated that it would continue to leverage its strengths to support Vanke's newly established management team in coordinating resources and promoting the continuous and stable development of Vanke. Ping An Fixed Income analysts pointed out that on January 27th of this year, the head of the Shenzhen State-owned Assets Supervision and Administration Commission mentioned that there were sufficient resources to support Vanke Group in promoting its stable development through all possible market-oriented and legal means. With senior management from Shenzhen Metro entering Vanke recently, it indicates a closer relationship with state-owned assets and suggests that Shenzhen's state-owned assets will further increase their support for Vanke, which will help Vanke overcome challenges. It is worth noting that China Vanke Co., Ltd. also issued a notice on the payment of the second tranche of medium-term notes on February 10th, 2022. According to the information disclosed in the notice, to ensure the smooth progress of the interest payment and redemption of the "22 Vanke MTN002" bonds and facilitate investors to receive the interest payment and redemption funds in a timely manner, relevant matters are announced. The announcement stated that the total issuance amount of the bonds is 3 billion yuan, with an interest rate of 2.98%, and the redemption date is February 16, 2025 (in case of statutory holidays, it will be postponed to the next working day). Vanke reminded bondholders in the interest payment/redemption method that if there are any changes to the fund transfer path, they should inform the China Central Depository & Clearing Co., Ltd. of the new fund transfer path before the interest payment/redemption. This article is reprinted from "Financial News", GMTEight editor: Liu Jiayin.