Logan Group was downgraded to BB- from BB with a negative outlook by Fitch. Its unsecured bond ratings were also downgraded to BB- from BB and its perps to B from B+. The downgrade came after revelation of an undisclosed private debt arrangement that was not on Logan’s balance sheet, and previously not stated in its contingent liabilities. Thus, Fitch cut Logan’s financial transparency score to 3 from 5. Logan said it guarantees around $1bn of the debt taken by a third party borrower, with the borrower providing counter-guarantees with onshore assets. Fitch notes that while Logan’s guarantee may not cause the company’s credit profile to deteriorate in terms of leverage and liquidity with regard to its rating action, it can lead to a loss in market confidence impacting its sales and funding going forward. Logan’s dollar bonds have been trending lower this week as seen in the chart below.
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