Concerns about concealed debt at Logan Group Co. fueled a heavy selloff in Chinese dollar bonds, both investment-grade and and high-yield. A key interest rate cut by China wasn’t enough to stem a drop in property stocks, with traders calling for more policy support as the economy slows.
Logan’s 2023 note sank 14.7 cents to a record low 62.3 cents after Debtwire reported the developer could be on the hook for $812 million of guarantees on outstanding obligations due through 2023. Concerns are weighing on a broader pool of China high-yield property issuers, which are headed for a 10th straight drop, according to a Bloomberg index. Country Garden Holdings Co.’s bond due 2024 tumbled 12.7 cents to 67.9 cents, extending last week’s decline.