Chinese Builders Rally on Plans for State-Guaranteed Bond Deals

China’s embattled developers surged in the stock and bond markets Tuesday on news that authorities are planning to help some raise fresh financing, adding to signs of official support for an industry grappling with a debt crisis and slumping home sales, Bloomberg News reported. Notes from Country Garden Holdings Co., CIFI Holdings Group Co. and Longfor Group Holdings Ltd. soared at least 11 cents on the dollar Tuesday, according to Bloomberg-compiled prices, set for the biggest gains since March. Their shares surged more than 9% in Hong Kong and a Bloomberg Intelligence gauge of the sector gained 2.4%, the most in three weeks. Chinese authorities have told several property developers that state-owned credit support provider China Bond Insurance Co. will give full guarantees for some of their upcoming onshore bond offerings, according to people familiar with the matter. The first batch of private developers to be included in the plan include Longfor, Seazen Group Ltd., CIFI, Country Garden and Gemdale Corp., the people said, asking not to be identified because the matter is private. Investors applauded the possibility of more help for the industry, even though it wouldn’t be the large-scale support that many have clamored for as officials signal that homeowners are the priority of property-sector stabilization efforts, not builders. Developers are suffering from a liquidity crunch, sparked by government efforts to curb leverage, that’s caused record levels of defaults and prompted concern about debt repayment from even the largest companies. Read more.