Logan Group Co.’s credit rating has been cut deeper into junk by S&P Global Ratings, as the credit risk assessor said the Chinese developer faces “huge” repayment pressure and a restructuring of its onshore debt is likely.
The builder plans to dispose of about 6 billion yuan ($949 million) of assets amid a liquidity squeeze, The Paper reported, joining others that are seeking to raise money through divestments.
Shares of Logan, which was also downgraded by Fitch Ratings on Friday, pared earlier losses to close 2.7% lower. A gauge of Chinese property developers fell 2% after earlier in the day plunging to the lowest intraday price since July 2016, alongside weakness in risk assets across Asia.
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Logan to Sell Real Estate Unit for 1.02 Billion Yuan (1:54 p.m. HK)
A subsidiary of Shenzhen Logan Holdings Co. signed an agreement Tuesday to sell a 100% stake in a real estate company together with shareholder loans to it to a unit of China Overseas Grand Oceans Group Ltd., according to a statement to the Shanghai stock exchange Friday.
Shenzhen Logan Holdings is a subsidiary of Hong Kong-listed Logan Group.
China Builder Logan Cut Deeper into Junk (1:35 p.m. HK)
Logan Group Co.’s credit rating has been cut deeper into junk by S&P Global Ratings.
The firm was downgraded to CCC- from B- by the credit risk assessor. “We believe restructuring of Logan’s onshore debt is likely,” as the borrower faces “huge” repayment pressure and large debt maturities, S&P analysts wrote in a Friday report.
Earlier, REDD reported that the developer must remit funds by Friday to repay a maturing loan that backs a private bond, citing three sources briefed on the matter.
Sunac Unit Gets Approval to Add Put Date for 2024 Onshore Bond (11:52 a.m. HK)
Sunac’s key onshore unit got bondholder approval this week to add a 2023 put-option date on a 4 billion yuan bond due 2024, according to a document disclosed Thursday with Shanghai Stock Exchange’s private information disclosure venue and seen by Bloomberg.
Logan Plans to Dispose of 6 Billion Yuan of Assets: The Paper (9:31 a.m. HK)
Logan Group plans to dispose of about 6 billion yuan of assets amid tight liquidity though there is no detailed list about the assets involved, The Paper reported late Thursday, citing an unidentified executive from the property developer.
The company has “voluntarily” halted construction of some projects, the executive was cited as saying at meeting with creditors Thursday.
Debt-Refinancing Halt Pushes Developers to Breaking Point: BI (8:18 a.m. HK)
Distressed China developers barred from accessing the bond markets for refinancing are set to face mounting default risk amid a slump in home sales, the slow pace in asset disposals and banks’ reluctance to extend loans, according to Bloomberg Intelligence.
State-backed firms, along with Longfor Group Holdings Ltd., CIFI and Country Garden, are set for market-share gains if their funding channels stay open, analyst Kristy Hung wrote.
Times China Cut to B+ by Fitch (5:08 p.m. HK)
Times China’s ratings were downgraded by Fitch to B+ from BB-, citing the real estate firm’s “weakened financial flexibility” due to slower cash collection and limited access to capital markets.
Fitch has a negative outlook on the ratings, reflecting “uncertainty about its ability to refinance its capital-market maturities due in 2023 as the offshore bond market remains inaccessible to the company.”