DHFL clears Rs 962-crore NCD interest payment within a week of default
The report also noted that the dues were paid within a 7-day grace period given to the company.
June 11, 2019 / 05:15 PM IST
Dewan Housing Finance Limited (DHFL) has paid Rs 962 crore interest on non-convertible debentures (NCD), according to a release filed with the exchanges on June 11.
The release also stated that the payments were made within the cure period of seven working days.
Domestic rating agencies ICRA and Crisil on June 6 downgraded the company's rating on Rs 850 crore worth of commercial paper to 'default', down from 'A4' due to the mortgage lender's deteriorating liquidity condition. The rating of the company, which defaulted on a debt repayment earlier this week, has been removed from watch with negative implications by both the rating agencies.
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The company had commercial paper (CP) worth Rs 750 crore maturing in June 2019 with the first repayment on June 7. DHFL on May 21 announced that it had stopped accepting fresh inflows in fixed deposits (FDs). It also stopped renewals and put premature withdrawals from existing fixed deposits on hold.
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However, it allowed withdrawals in case of medical emergencies. The DHFL management said that it took these measures to manage the liquidity crunch and navigate through multiple downgrades by credit evaluators on its debt instruments.
On May 17, CARE Ratings had downgraded DHFL's FD programme worth Rs 20,000 crore from ‘A’ to ‘BBB-‘. CARE A signifies “low” credit risk, while CARE BBB- signifies “moderate” credit risk.
The mortgage lender is dependent on the refinancing of maturing liabilities, given the relatively longer tenure of the loans inherent in the housing finance industry.
The NBFC space has been under pressure since September last year after infrastructure financier IL&FS defaulted on crucial payments, triggering fears of a liquidity crisis.(With inputs from PTI)