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Longfor Group Shares Surge Over 9% on Debt Repayment Assurances
Shares of Chinese property developer Longfor Group (HK:0960) surged on Friday after the company reportedly reassured bondholders it has enough capital to meet its near-term debt obligations, providing a rare piece of positive news from the country's embattled real estate sector.
The company's Hong Kong-listed stock closed up 9.2% at HK$6.37, significantly outpacing the Hang Seng index's 2.1% gain for the day.
Repayment and Funding Details
According to a Bloomberg report on Thursday, Longfor informed bondholders it has sufficient funds to repay a 1.3 billion yuan ($190 million) bank loan that is due later in September. The developer also indicated it expects to be able to repay a U.S. dollar-denominated bond maturing next year.
To bolster its financial position, the company also reportedly secured 3.2 billion yuan in new loans collateralized against some of its mall properties. This move signals that Longfor retains access to financing channels, a critical advantage in the current market.
AdSector Context
The announcement brought a measure of relief to debt and equity investors who remain on edge due to the prolonged liquidity crisis in China's property market. Longfor's ability to meet its obligations stands in stark contrast to many of its peers.
The sector has been plagued by a wave of high-profile defaults from major firms such as China Evergrande Group (HK:6666) and Sunac China Holdings (HK:1918). Longfor is now among a shrinking group of major Chinese developers that have consistently met their debt payments, making its financial stability a key focus for market participants.
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