Reliance MF extends repayment date on Reliance Home Finance NCDs

Reliance Home Finance has missed a payment towards maturing non-convertible debentures (NCDs) worth Rs 400 crore to Reliance Mutal Fund on June 28, and on June 29, the NCD was extended by four months till October 31.

On June 28, a few schemes of Reliance Mutual Fund had maturities out of the investments in the NCD of Reliance Home Finance (RHF) to the tune of Rs 400 crore.

“RHF has paid interest that was due, and the maturity of the said instrument has been extended to October 31, 2019, with additional cover and coupon,” the press release from Reliance Mutual Fund said.

Four schemes of Reliance Mutual Fund--Reliance Ultra Short Duration Fund, Reliance Credit Risk Fund Reliance Strategic Debt Fund--had investment in NCDs of Reliance Home Finance.

“As per regulatory guidelines prescribed by SEBI, we have made provisions and marked-down our investments in the securities issued by Reliance Home Finance,” the press release from Reliance Mutual Fund stated.

Reliance Home Finance also notified of the extension in a separate press release, adding that it was done to address a timing mismatch from the receipt of proceeds from an ongoing asset monetization of retail pools of the company.

In the last few weeks, rating agencies have revised credit ratings of certain debt instruments of Reliance Commercial Finance and Reliance Home Finance to ‘default’, or D, grade on concerns over the group’s deteriorating financial profile.

At a recent press conference, Chairman Ajay Tyagi said that the market regulator does not recognise any standstill agreement between mutacompanies and mutual fund houses.