Vanke, the real estate giant, is still in the whirlpool of public opinion. A few days ago, Moody's, an overseas rating company, downgraded Vanke's credit rating from "Ba1" to "Ba3". Regarding the further downgrade of the rating, Vanke expressed "resolute opposition".
For Vanke, in order to solve the debt problem, the more critical issue is to sell: one is to sell the house and increase the sales and collection of money, and the other is to sell assets and sell part of the operating real estate in exchange for the space to survive.
The rating was downgraded
On April 26, Moody's, an overseas rating agency, downgraded the credit rating of Vanke, a leading real estate company, by two levels from "Ba1" to "Ba3". This means that Moody's has given Vanke a rating that is already at the bottom of the Ba sequence. For this level, the rating agency's view is that the credit quality of the relevant subject is poor, there is a certain speculative component, and the credit risk is high.
In fact, before Vanke's liquidity pressure, Moody's had always regarded it as a high-quality company to invest in. However, starting in September last year, Moody's put Vanke's rating on downgrade watch. Since the beginning of this year, Moody's has begun to downgrade Vanke's credit rating in succession. In March, Moody's revoked Vanke's Baa3 issuer rating, giving the company a Ba1 rating, and downgraded its senior unsecured debt rating to Ba2.
In addition to Moody's, Fitch and Standard & Poor's have also downgraded Vanke's ratings. On 27 March, Fitch downgraded Vanke's long-term foreign currency issuer rating to 'BB+' from 'BBB', which is 'non-investment grade' or 'junk'. In early April, Standard & Poor's downgraded Vanke's credit rating to "BB+" from "BBB+", also classified as "junk" with a negative outlook.
On April 27, Vanke expressed firm opposition to Moody's downgrading the company's rating again, "hoping that Moody's can accurately assess and reflect the company's situation and maintain market stability." "In Vanke's view, the rating agency's decision to adjust the company's rating based on the pessimistic outlook for the industry and concerns about the company's uncertainty does not fully and effectively reflect the company's positive measures in terms of operation, financing and liquidity, and will also mislead the market and exacerbate unnecessary panic.
Vanke said that at present, the company's operation is stable, the contracted sales scale continues to maintain the leading position in the industry, the support of financial institutions for the company is as always, and the major shareholders support the company and continue to provide substantial support.
Self-help has begun
In the face of the unprecedented crisis, at the investor conference held on April 15, Vanke's management admitted that Vanke was indeed experiencing phased operational difficulties and its liquidity was under pressure in the short term. However, Vanke has formulated a package of plans to stabilize operations and reduce debt, which can properly resolve these temporary pressures.
According to the data, as of the end of 2023, Vanke's total interest-bearing liabilities were 320 billion yuan, including 1.06 billion yuan of short-term borrowings, 62.4 billion yuan of interest-bearing liabilities due within one year, and 99.8 billion yuan of cash on hand. It looks good, but combined with this year's payables, the pressure is still not to be underestimated.
In order to solve the crisis, Vanke first based on "self-help". This is mainly manifested on the sales side and the financing side.
In terms of sales, in the first quarter, Vanke achieved a total of 57.98 billion yuan in contracted sales, a year-on-year decrease of 41.36 billion yuan. However, with the warming of policies, Vanke is also increasing sales and payment collection. Especially in March, Vanke achieved contracted sales of 24.5 billion yuan, an increase of 74.82% month-on-month.
In addition to selling houses, Vanke also received cash from the disposal of assets. At the previous investor conference, Vanke's management said that Vanke would reopen and review all the businesses in hand, sort them out by category, and formulate targeted plans.
Recently, it has been rumored in the market that Vanke intends to transfer 10 hotels, commercial, office and apartment assets in Shenzhen through asset transactions or equity transactions, involving an amount of more than 8.7 billion yuan. In this regard, after denying this rumor, Vanke said that promoting asset transactions is one of the business tasks that Vanke has always attached great importance to, and Vanke is actively promoting asset transactions, including some of the assets mentioned in the rumors.
In terms of financing, Vanke said that it has mobilized all front-line forces to make good use of a series of policy-based financing tools that are conducive to the industry's risk mitigation. As of the end of March, Vanke had reported 42 "white list" projects for real estate financing, involving new financing of 16.95 billion yuan. In addition, the book balance of Vanke's investment real estate is as high as 110 billion yuan, and the follow-up mortgage financing space is relatively large.
In addition, securitization is still ongoing. According to reports, Vanke's "CICC SCP REITs" plans to raise 3.26 billion yuan for a period of 25 years, of which the largest shareholder, Shenzhen Railway Group, will subscribe for 1 billion yuan. Vanke's "Huaxia Wanwei Warehousing and Logistics REITs" plan plans to raise about 1.16 billion yuan.
Can this series of measures win valuable time for Vanke to survive? Toutiao-kun will keep a close eye on it.