Logan Bonds Set for Their Worst Week as Debt Worries Resurface

Published 25 Feb 2022, 04:21:46.25 GMT

(Bloomberg) -- China builder Logan Group Co.’s plunging dollar bonds are set for their worst week ever as concerns about its financial health resurface.

The firm’s 5.25% note due 2023 fell 13.9 cents on the dollar to 35.2 cents, set for a fresh low after declining 18.2 cents the previous day, Bloomberg-compiled prices show Friday.

Trading for an onshore bond was halted in Shanghai as it plunged 18% to 49 yuan, also on pace for a record low. Shares dropped as much as 17% to their lowest level since 2016.

Once seen as one of China’s stronger developers, Logan is facing increased investor scrutiny over the possible scale of its undisclosed debt. The borrower’s credit ratings were slashed deeper into junk by Moody’s Investors Service and Fitch Ratings earlier this month. Moody’s analysts highlighted Logan’s weakened access to funding and concerns over “governance practices.”

Speculation that institutional investors may be reducing their exposure and concerns about undisclosed debt contributed to declines in the developer’s dollar bonds Thursday, according to Charles Macgregor, head of Asia at Lucror Analytics. Logan didn’t respond to a Bloomberg request for comment Friday morning.

Logan and its subsidiaries have to repay or refinance $989 million in local and offshore notes this year, including a 2 billion yuan ($316 million) bond due March 22, Bloomberg-compiled data show.

By Rebecca Choong Wilkins

--With assistance from Tongjian Dong and Qingqi She.