China Vanke is planning to issue RMB 15bn ($2.2bn) to boost its capital buffers. Caixin Global reports that it would be the biggest equity fundraising plan in the sector since the removal of equity refinancing restrictions in late November. Vanke is said to sell about 1.1bn shares (9.46% of its total share capital) to around 35 specific investors in the Shenzhen stock market. The proceeds will be used to help navigate the slowdown in the sector by replenishing liquidity and funding real estate projects. Besides, Vanke is also planning a new bond issuance and has reached agreements with banks for over RMB 300bn ($44bn) of new credit lines to improve its funding access.
Shenzhen Metro Group holds 27.88% of Vanke and sources report that it is unclear if they will take part in the share placement. Vanke is among the highly rated developers in the country, rated Baa1/BBB+/BBB+. While the developer’s net debt-to-assets ratio was at 35.5% at end-June 2022, lower than most peers, it has ~RMB 40bn ($5.9bn) in bond maturities due this year.
Vanke’s dollar bonds were trading stable – its 3.15% 2025s are at 94.03 cents on the dollar, yielding 6.04%.
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