Heavily indebted China Vanke, one of China’s largest developers, said it has secured a long-term loan from a Chinese commercial bank, providing it some relief following its credit rating downgrade a week ago by Moody’s to junk status, reports the South China Morning Post. The Shenzhen-based developer said in a statement filed with the Hong Kong exchange late on Tuesday that it had obtained a RMB 1.4 billion (US$194 million) loan from Industrial Bank for 14 years, based on a RMB 35 billion guarantee authorised during a shareholders meeting held in June.
The loans were secured and guaranteed by units Shanghai Central District Real Estate and Shanghai Vanke Enterprise. Shanghai Central District is fully owned by Shanghai Vanke.
“The risks of this guarantee are controllable and there will be no harm to the interests of the company and shareholders,” state-backed developer Vanke said while adding the purpose of the loan was to meet “operational needs” as well as to repay the developer’s loans and bonds.