DHFL’s commercial paper rating downgraded to default by Crisil, Icra

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Published: June 6, 2019 5:25:02 AM

The lender’s total borrowings, including deposits, loans from NHB, banks and the debt markets, stood at Rs 1 lakh crore at the end of December 2018, according to a company presentation.

DHFL, DHFL commercial paper rating, Crisil, Icra, non convertible debentures, Mutual fund housesThe housing finance lender has outstanding CPs worth Rs 850 crore of which Rs 750 crore matures in June.

Credit rating agencies Crisil and Icra on Wednesday downgraded commercial paper (CPs) of Dewan Housing Finance Corporation (DHFL) to ‘default’ after the lender delayed interest payments. The housing finance lender has outstanding CPs worth Rs 850 crore of which Rs 750 crore matures in June. “The first CP maturity is on June 7 and with inadequate liquidity as on date to service the debt, we expect the CPs to be in default on maturity,” Crisil noted
According to industry players, DHFL has missed interest payments on its non-convertible debentures (NCDs) worth nearly Rs 1,000 crore. An email sent to the company remained unanswered till the time of going to press.

The lender’s total borrowings, including deposits, loans from NHB, banks and the debt markets, stood at Rs 1 lakh crore at the end of December 2018, according to a company presentation. While 47% of the borrowings were from debt capital markets, 38% was in the form of bank loans.

Also read: How DHFL’s delay in bond repayment of over Rs 900 crore may impact mutual fund investors

Mutual fund houses had an exposure of Rs 4,400 crore as at the end April 2019, according to data by Value Research. Fund managers indicated to FE the DHFL management had informed them the money would be paid by June 10. The lender faced series of downgrades in May as rating agencies raised concerns over the asset-liability mismatch in its books. Icra, Care and Crisil downgraded long-term debt instruments of DHFL in May.

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