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Last Updated : Jul 26, 2019 06:16 PM IST | Source: Moneycontrol.com

10 mutual fund houses hold bulk of Yes Bank's riskier bonds: Report

Reliance MF leads the pack with Rs 2,216 crore of exposure, followed by Franklin Templeton MF (Rs 550 crore) and UTI MF (Rs 370 crore).

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India's financial sector continues to boil over as industry data showed that as of June 2019, 10 mutual fund companies held as much as Rs 3,294 crore worth of YES Bank's riskier additional tier I (AT-I) bonds.

report in Business Standard pointed out that  Reliance MF leads the pack with Rs 2,216 crore of exposure, followed by Franklin Templeton MF (Rs 550 crore) and UTI MF  (Rs 370 crore).

Other big exposures are with Kotak MF (Rs 116 crore), Baroda MF (Rs 66 crore), DHFL Pramerica MF (Rs 46 crore) and Sundaram MF (Rs 12 crore), the report added.

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Moneycontrol could not independently verify the report.

ICRA double downgraded these bonds, which account for Rs 10,800 crore of the bank's debt, to BBB - grade and termed them 'riskier' after a rating revision and maintained a negative outlook on the Bank. Other bonds worth Rs 22,112 crore received single point downgrades.

Also Read: TPG Capital, Advent International in talks to infuse $350mn each in Yes Bank 

AT-I bonds are triggered on financial instability of a bank below the pre-determined levels and converted into stakes so as to reduce investor losses. ICRA noted that these were riskier as the coupon payments were non-cumulative, the Bank held full control over non-payment in event of default, and the payment is subject to clearance of Basel III norms.

Fund managers told the paper that market-to-market impact would be an immediate concern after the rating downgrade.
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First Published on Jul 26, 2019 01:42 pm
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