Troubled property developer China Vanke will receive a 7.8 billion yuan (US$1.1 billion) lifeline in the form of bank loans guaranteed by its subsidiaries, a day after the company had its credit rating cut.

Shenzhen Yili Real Estate Development provided a guarantee for a 4.49 billion yuan loan, while Shenzhen Zhongke Wanxin Industrial offered a guarantee for a 3.29 billion yuan borrowing, Vanke said in a Friday stock exchange filing.

The loan arrangement came after Fitch Ratings on Thursday downgraded the Shenzhen-based developer's long-term foreign- and local-currency issuer default ratings to "BB-" from "BB+" and said the company's outlook is negative. A negative outlook means there is a greater than even chance for a ratings downgrade over a one- to two-year horizon.

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"The downgrade reflects a reduction in China Vanke's liquidity buffer following the weaker-than-expected sales performance in the year-to-date," Fitch analysts said.

"The sustained sales deterioration has affected China Vanke's nonbank funding access, and the company will increasingly rely on its cash on hand, asset disposals and secured onshore bank financing to address its sizeable debt maturities in 2024 and 2025."

Fitch's liquidity concerns came after Vanke had obtained 20 billion yuan in syndicated loans from banks including China Merchants Bank using shares in its logistics unit VX Logistics as collateral, state-owned media reported.

"VX Logistics is one of Vanke key assets in the logistics segment, which owns more than 200 warehouses in China with total gross floor area of more than 10 million square metres," wrote Raymond Cheng, managing director and head of China and Hong property at CGS International. "The book value of the units was more than 30 billion yuan."

In March, Vanke reported it had obtained 1.4 billion in loans from Industrial Bank based on a 35 billion yuan 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.

Central authorities are sending positive signals to the property sector, unveiling "historical" measures on May 17 to boost home purchases and digest housing inventory.