(Bloomberg) -- China Vanke Co., the Chinese state-backed developer that’s become the latest flashpoint in the nation’s property crisis, is in advanced talks with major banks for a loan of about 50 billion yuan ($6.9 billion), people familiar with the matter said. 

If signed, it would be the largest loan in Asia Pacific, excluding Japan, since Taiwan-based National Housing and Urban Regeneration Center’s $14 billion deal in 2022, according to Bloomberg-compiled data. Talks over the facility, led by Industrial & Commercial Bank of China, began a few months ago after financial regulators instructed the banks to offer funding support to the developer, said the people, who asked not to be identified as the matter is private. 

China’s second largest developer, once considered a sound player in the sector, particularly given the state-backing, has been raising funds to calm investors’ concern over its liquidity strains. The sheer deal size and the hastened efforts to get it across the finish line would reflect the parties’ determination to avoid what would amount to one of the biggest defaults in the years-long industry crisis.

Vanke’s 4.2% notes due June 7 climbed to 99.6 cents on the dollar on Thursday, according to Bloomberg-compiled data, signaling strong investor expectation for timely payment. But its notes due in 2029 still trade at 60 cents, showing lingering doubt over its long-term debt outlook. The company has 1.06 trillion yuan in total liabilities as of March, according to its latest financial report.

The latest facility that the company seeks would be backed by about 80 billion to 90 billion yuan worth of real estate assets, the people added. They are part of an asset package, totaling about 130 billion yuan, that Vanke has been putting together to use as collateral, they said. 

The ICBC-led deal would be the second mega loan Vanke received this year. The ongoing talks with the lenders have already resulted in another 20 billion yuan syndicated loan that Vanke signed last week with financial institutions, including China Merchants Bank. 

About six to seven banks plan to participate in the 50 billion yuan facility, including China Construction Bank and Ping An Bank, two of the people said. Proceeds will be used to repay bonds and other private debt, also known as non-standard debt, they said.

Banks are still in the process of choosing collateral, according to two of the people. The transaction is not final and subject to changes, the two people added.

It’s unclear the total amount of assets Vanke used to back the 20 billion yuan loan. But the company pledged about 27 billion yuan worth of shares in unit Vanke Logistics Development Co. to the Shenzhen branch of China Merchants Bank, according to the National Enterprise Credit Information Publicity System.

Vanke didn’t immediately offer a comment when reached Thursday. ICBC, CCB and Ping An didn’t immediately reply to requests for comment. 

Talks over the 50 billion yuan loan proposal started as early as March, two people said. Bloomberg reported at the time that Vanke’s major creditor banks were considering a plan to swap bond holdings worth tens of billions of yuan in principal into secured debt. 

The swap, coordinated by China’s financial regulators and the local government of Shenzhen, would help the real estate company avoid a public default while giving banks collateral to protect against any potential losses.

Vanke is also on a selling spree to ease liquidity pressure. It sold this week an unfinished property project, once designated as its new headquarters, to buyers including a major shareholder. The company was also in talks with state-owned investment companies to sell its entire stake in logistics firm GLP Pte, Bloomberg reported in April. 

--With assistance from Emma Dong and Lorretta Chen.

(Updates with more background in third, fourth paragraphs.)

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