Dollar bonds of Chinese property developer Longfor Group fell by over 5 points with the resignation by the founder and chairwoman, Wu Yajun. The billionaire businesswoman cited health and age reasons, with the resignation coming at a time when investors’ sentiment in the sector has already been shattered by defaults, fall in home sales and falling confidence on government support for the industry. Longfor is an investment grade company (Baa2/BBB/BBB) and was the first among 16 select private-sector developer firms to sell local bonds guaranteed by state-owned China Bond Insurance Co under a pilot program. While the news led to a rally across its bonds at that time. After a short-lived rally, higher rated property bonds have been on a downtrend following CIFI Holdings not making payments on certain debts, highlighting deeper strains in the sector among the higher rated names.
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