LGFV bonds bounce back after default fear

By Addison Gong
10 Dec 2019

Fear of an onshore default by a Chinese local government financing vehicle (LGFV) led to a sell-off in the dollar bond market on Monday. But after news emerged of a government rescue of the company, both the primary and secondary markets quickly recovered.

“The market was very volatile [on Monday] and it was all about the LGFVs,” said a banker in Hong Kong.

Inner Mongolia-based Hohhot Economic and Technological Development Zone Investment Development Group Co was said to have failed to make payments on a Rmb1bn ($142m) 6.8% puttable bond ...

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