Chinese developer Logan makes interest payments amid cash crunch – sources

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SHANGHAI, March 10 (Reuters) – Chinese property developer Logan Group has paid interest on a U.S. dollar bond, two sources with knowledge of the matter said, eliminating a debt problem as the company grapples with a shortage of liquidity and low investor confidence.

The company made a semi-annual interest payment of $9.66 million on its $280 million 6.9% June 2024 bond that was due to arrive on Wednesday, the sources said. The bond’s price has plunged in recent weeks to around 15 cents on the dollar, yielding more than 130%, as confidence in Logan’s ability to service debt plummets.

Logan did not immediately respond to a request for comment.

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Ratings agency S&P Global downgraded Logan Group to “B-” on Tuesday and placed it on watch for further downgrades, noting that confidence in the company is “weakening much faster than expected.”

Along with falling bond prices, shares of Logan have plunged nearly 70% this year to record highs.

S&P said falling confidence had significantly reduced Logan’s accessible cash balance and tighter funding channels would add pressure on the company’s liquidity.

S&P stock followed cuts from Fitch and Moody’s a day earlier.

Refinitiv data shows the company has 28 outstanding bonds totaling $7.06 billion, of which $989.74 million are due to mature this year.

Logan said he has been talking to public companies and financial institutions since January about asset disposals.

A source familiar with the matter said the company was in talks with the holders of two onshore bonds that can be resold and mature on March 19 and 22, respectively, about payment extensions.

There was no clear plan yet, the source added.

The 1.51 billion yuan ($238.93 million) 5.5% March 2024 Logan note traded in Shenzhen, tradeable on March 19, fell more than 30% on Thursday, triggering stops automatic exchanges.

($1 = 6.3198 Chinese Yuan)

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Reporting by Shuyan Wang, Steven Bian and Andrew Galbraith; Editing by Shivani Singh

Our standards: The Thomson Reuters Trust Principles.

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