S&P slices Logan Group

S&P said it sliced Logan Group Co. Ltd.’s issuer rating to B- from BB- and the rating on the dollar-denominated notes that the company guarantees to CCC+ from B+. The agency also placed all the ratings on CreditWatch with negative implications.

“The China-based property developer's accessible cash faces a significant risk of a sharp decline because banks are restricting more cash to ensure project level debt will be repaid. Together with slower cash generation from sales, the company's liquidity will face significant pressure,” S&P said in a press release.

“Logan needs to prevent its banking relationships and capital market standing from further deterioration to sustain its liquidity. Its liquidity will face substantial additional pressure if it cannot at least partly revive the weakening banking relationships. This is because banks may further restrict Logan's cash while closing its funding access,” the agency warned.

S&P said it aims to resolve the CreditWatch as soon as practicable once it has greater clarity on Logan’s fund-raising plans.

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