Mortgage lender Dewan Housing Finance Ltd. has partially defaulted in repaying its investors of commercial paper. The company could pay only 40% of the aggregate amount.
According to a notification to the stock exchanges, DHFL paid 40% of ₹375 crore, which is ₹150 crore, “on a proportionate basis.”
“The balance of ₹225 crore will be paid once the surplus cash flow position improves over the next couple of days,” the lender said.
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While DHFL met liability obligations of ₹40,000 crore since September, there was no recourse from lenders, it said. The company met all its financial obligations through a combination of internal accruals, sell down of its loan assets and monetisation of non-core assets.
Earlier this month, ratings agency ICRA downgraded the rating on the ₹850-crore commercial paper (CP) of the lender to ‘junk grade’, after DHFL delayed interest payment to the investors of non-convertible debentures (NCD). In June, ₹750 crore CPs were maturing, ICRA had said.
“Pursuant to the downgrade by rating agencies, expecting a default for the Commercial Papers (CP) much before they had fallen due, the mutual funds had already taken a 100% markdown on their CP investments,” DHFL said.
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Even after these downgrades, DHFL met its obligations of CP holders and paid ₹375 crore (for other CPs that matured earlier) before Tuesday’s partial default, it said.
DHFL further added that it was already in the process of selling down its loan assets, including wholesale project loans, to make good all its obligations and maintain its 100% commitment to all its creditors as it had done ever since the liquidity crisis started in September 2018.