Developer China Vanke assures it can repay $630 million dollar bond amid liquidity worries

investing.com:

By Clare Jim and Ziyi Tang

HONG KONG/BEIJING (Reuters) — Struggling property developer China Vanke said on Tuesday it has funding in place to repay $630 million in dollar notes due on March 11, amid more selling pressure on its bonds as concern mounts over its liquidity.

China's No.2 property developer by sales said in a statement to Reuters that the repayment process for the bond was «orderly». Shares of the company and prices of its 2029 dollar bonds recovered slightly after the statement.

Investors have dumped shares and bonds of state-backed Vanke over the past week amid reports that the developer, previously seen by the market as financially sound, was seeking debt maturity extensions with some insurers.

A source with knowledge of the matter told Reuters on Tuesday that insurers including Taikang Insurance, state-owned PICC Property and Casualty Co and New China Life Insurance have received requests from Vanke for debt extensions. News about New China has been previously reported by other media.

Vanke and the three insurers did not immediately respond to requests for comment.

The concerns about Vanke's financial health come after a string of defaults by Chinese developers since the country's property sector slipped into a debt crisis in mid-2021, including giants China Evergrande (HK:3333) Group and Country Garden.

Any repayment troubles at Vanke, one of the few remaining Chinese developers with investment grade credit ratings, could further dampen market confidence, analysts said.

Moody's (NYSE:MCO) downgraded some of Vanke's bonds to «junk» in November, and if another major rating agency such as S&P or Fitch follows suit, those bonds face the prospect of being dumped out of some of the world's most important