DHFL pays off dues on bonds

DHFL paid more than Rs 850 crore on Tuesday after it sealed another deal on loan portfolio sales.

DHFL pays off dues on bonds
MUMBAI: Dewan Housing Finance (DHFL) has cleared pending interest dues on bonds it had sold last year, scotching speculation that a default was likely on the payments that were otherwise scheduled before the Eid festival earlier this month.

The home financier paid more than Rs 850 crore Tuesday after it sealed another deal on loan portfolio sales, said two people with first-hand information on the repayments.

Last week, the housing finance company missed paying nearly Rs 1,000 crore by way of interest on bonds sold more than a year ago. In the past seven days, it paid a fraction of the sum, about Rs 70-80 crore, to retail investors.


The company sent a note to stock exchanges detailing the interest payments that were supposed to be made on June 4.

“We hereby confirm that the company has today made full payment toward interest payable on NCDs issued through public issue,” DHFL said.

Axis Bank, UTI Mutual Fund, and IndusInd Bank were some of the institutional investors besides standalone provident fund trusts that had bought the NCDs.
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Wadhanwan Global Capital, the holding company, received Rs 2,200 crore Monday from the sales. From the proceeds, the embattled home financier is expected to receive Rs 500 crore, ET reported on June 11. The parent company received more than half of the sum.

With the latest round of repayments, the company will seek a revision of its rating grade.

“We have received about Rs 2,200 crore via the Aadhar stake sale, of which a portion will go to DHFL,” Chairman Kapil Wadhawan told ET Tuesday.

“Once we clear our technical delays (on bond interest payments), we will go back to rating companies seeking an upgrade,” he said.
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But rating companies normally have a cooling period of three months within which they are mandated not to change any rating grade that is reduced to ‘D’ or default.

In the past two weeks, rating companies including Icra, Crisil and CARE have downgraded DHFL debt securities to D or default, citing delays in interest payments. On June 19, the company is due to pay pension funds that own some debt at the financier.
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Since the liquidity crisis began in September last year, 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.
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