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Moody’s Rating Review Dips China Vanke’s Hong Kong Shares By 1% 

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Vanke's stocks and bonds faced notable sell-off pressure last week, triggered by reports of financial strain, prompting requests for debt maturity extensions from investors. 

Image Source: Bloomberg
Vanke’s stocks and bonds faced notable sell-off pressure last week, triggered by reports of financial strain, prompting requests for debt maturity extensions from investors. 
Image Source: Bloomberg 

On Tuesday, China Vanke’s Hong Kong shares opened 1% lower following Moody’s announcement that the property company’s rating was under consideration for a downgrade to junk status. Concurrently, its Shenzhen-listed shares experienced a 0.6% decline. Moody’s, on Monday, withdrew Vanke’s “Baa3” rating, the lowest investment grade rating, placing all of Vanke’s ratings under a “review for downgrade.” 

In response, Vanke assured Reuters that its “current operation and refinancing are normal, and financing channels are stable.” The company emphasized that the potential impact of a ratings downgrade on its financing activities was “controllable.” 

Meanwhile, the Hang Seng Index in Hong Kong saw a 0.2% increase, while the Hang Seng Mainland Property Index and China’s CSI300 Index both dipped by 0.1% in early Tuesday trade. 

Moody’s decision followed a Reuters report on Monday, revealing China’s call for banks to bolster financing support for state-backed Vanke. The government also urged creditors to consider extending private debt maturities. 

Last week, Vanke’s shares and bonds faced significant selling pressure amid reports of financial stress, prompting the company to seek debt maturity extensions. On Friday, Vanke confirmed to Reuters that it had deposited the necessary funds to repay USD 630 million U.S. dollar notes due on Monday. 

Notably, Vanke, backed by the government with a 33.4% ownership by Shenzhen Metro, falls under the oversight of Shenzhen’s state asset regulator. 

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