(Bloomberg) -- China Vanke Co. said it has prepared funds to repay a dollar bond due next week, seeking to soothe investors concerned that the developer may need more breathing room to meet its debt obligations. 

Funds to repay its 5.35% dollar bond due March 11 are ready and the payment is being orderly arranged, Vanke said in a response to Bloomberg on Tuesday. The bond due next week is trading at 98.8 cents, according to Bloomberg-compiled prices, indicating investors expect repayment on time. 

Bloomberg earlier reported that some of China’s largest insurers are warning over debt risks at the state-backed developer, the country’s second biggest by sales. At least two Beijing-based insurers that farm out annuity investments told their external portfolio managers late last week to closely monitor Vanke’s credit risks, according to people familiar with the matter. One life insurer also told its pension managers to curb exposure, the people added.

Shares of Vanke fell as much as 4.1% to a record low in Hong Kong trading on Tuesday. The developer’s longer-term bonds maturing from 2024 to 2029 are trading at 40 to 88 cents, suggesting concerns over its future repayment ability.

The stress at Vanke threatens to elevate the sector’s debt woes because the company is seen as a bellwether for Beijing’s support for major developers with strong state ties. The company is also one of China’s few remaining investment-grade builders, following a record wave of defaults that engulfed giants including Country Garden Holdings Co. and China Evergrande Group. 

--With assistance from Alice Huang.

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