MUMBAI: Dewan Housing Finance Ltd (DHFL) has missed Tuesdays interest payment deadline on a set of outstanding bonds, but the embattled company is in talks with financiers to help meet its Rs 1,000-crore-plus obligation within the seven-day grace period and prevent a default.Multiple market sources told ET that UTI Mutual Fund and some private sector lenders, including Axis Bank and IndusInd Bank, were among the investors that bought DHFL debt sold last year.
Some individual investors are also said to have invested in these.Emails sent late in the evening to DHFL and the three institutional investors remained unanswered till press time.The company was trying to stitch together some securitisation deals with two or three select banks, but that did not fructify, said one of the persons.Mutual Funds will have to Mark Down InvestmentsAlso, banks are shut tomorrow (Wednesday) because of Eid.
The financing could come in by the end of this week, the person said.The Debenture Trust Deed allows a grace period of seven days within which interest payments can be made, the person added.The delay in payments will require MFs to mark down their Net Asset Values (NAVs) by about 75% in the DHFL instruments in order to avoid any redemption pressure by wealthy investors.Last year in June, the home financier raised about Rs 11,000 crore through public issue of bonds.
These non-convertible debentures (NCDs) offered investors annual yields of 8.90 per cent to 9.10 per cent across maturities.Pune-based Catalyst Trusteeship was the custodian for the bond sale.DHFL has been facing a cash crunch since September, when ILFS defaulted on its payment obligations.
The home financier has so far taken a two-pronged approach to raise money.While it is in talks with international private equity players to sell the promoter stake strategically, it has also been selling down loan portfolios.
This route is used by para banks and home financiers to sell down loans to banks at a negotiated price.Since the NBFC liquidity crisis began in September, DHFL has sold retail loans worth about Rs 30,000 crore via securitisation.
In this period, the home financier has paid about Rs 40,000 crore of financial obligations.DHFL is also holding talks with US-based Oaktree Capital on offloading wholesale realty loans worth Rs 17,000-18,000 crore, and has signed a nonbinding pact to this effect, ET reported on May17.
The proposed Oaktree deal should come in the next few days, giving relief to bond holders, said an investor who is in touch with the DHFL management.In September, DHFL faces another big round of payments.Some large state-owned companies are expected to extend credit lines to DHFL, but with stricter conditions, the person said.A few weeks ago, Crisil downgraded DHFL commercial paper to A4+ from A3+, citing liquidity concerns.
It remains on a rating watch, with negative implications.The latest miss on interest payments could prompt another rating company to consider downgrading DHFLs debt securities to default unless the company were to garner the cash to meet its obligations within the grace period.695349816943785469174702