China Vanke secures RMB 22 bn loan from Shenzhen Metro, offers collateral

China Vanke, through its board of directors, approved a framework agreement for a shareholder loan and related guarantees. Shenzhen Metro Group will provide China Vanke with a credit line of up to RMB 22 billion, effective from 2025 until China Vanke's 2025 annual shareholders' meeting. This financing aims to repay the principal and interest of China Vanke's publicly issued bonds and other designated loans.

The framework agreement stipulates that China Vanke will offer collateral, including operational real estate, fixed assets, inventory, construction-in-progress, and equity stakes, with loan-to-value ratios ranging from 50% to 70%. The loan interest rates will be determined by either 2.34% or the 1-year LPR minus 66 basis points, whichever is higher, and the loan term will not exceed three years, with potential for extension.

Shenzhen Metro Group has already provided RMB 20.373 billion in unsecured loans, with RMB 19.71 billion drawn. The total principal and interest under the framework agreement is projected not to exceed RMB 23.691 billion. The transaction requires shareholder approval, with Shenzhen Metro Group abstaining from the vote.