Concerns over the financial health of Logan Group Co. have shaken investor confidence in what was seen as one of China’s stronger developers, deepening the turmoil faced by the crisis-hit industry.
Fitch Ratings downgraded the firm this week, citing a "recent disclosure of a private debt arrangement that is off its balance sheet.” Questions about the possible scale of Logan’s undisclosed debt had swirled in the weeks prior, pushing its dollar bonds to record declines and sending its shares to the lowest since 2017.
The builder’s debt had remained relatively resilient to the credit crunch engulfing the nation’s real estate sector, even as a record wave of downgrades hit its peers. But uncertainty remains over its private debt guarantees, and credit assessors have called for more clarity as investors scrutinize the liquidity of firms whose finances were long considered more sound than the likes of China Evergrande Group.