Investors in rupee corporate bonds are waiting to see whether a major Indian shadow lender will repay Rs.1.25 billion ($18 million) of bond payments due this month, and help avoid a further worsening in sentiment in the nation’s credit markets.
Dewan Housing Finance Corp. is already behind schedule in meeting debt obligations as it missed paying Rs. 9.6 billion of interest that was due on Tuesday in bonds, a company official said, adding that the debt would be serviced in the next seven days. The home financier is expected to get money from Blackstone Group LP on Monday from a previously agreed group unit sale.
That will help the lender repay obligations during the so-called cure period of seven days, and also other maturities that will be up for redemption.
Timely repayment by Dewan Housing will help allay wariness in the nation’s credit markets, where infrastructure financier IL&FS Group’s default last year has prompted investors to stay away from debt of shadow lenders. The funding crunch in the shadow banking sector could weigh further on Indian economic growth, which has already slowed to a five-year low, as borrowers find it harder to raise cash.
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Credit market stakeholders will be watching out for following payments for Dewan Housing.
Security Servicing Date Obligation Amount due (in million rupees) 9% June 2019 June 10 Interest and principal 190.75 9% June 2026 June 10 Interest 15.75 10.7% June 2024 June 10 Interest 21.4 10.7% June 2021 June 10 Interest 16.05 10.7% June 2024 June 12 Interest 58.85 8.93% Aug. 2026 June 17 Interest 3.31 8.83% Aug. 2019 June 17 Interest 1.2 8.88% Aug. 2021 June 17 Interest 7.96 9.1% June 2021 June 17 Interest 51.96 9.1% April 2020 June 17 Interest 45.5 9.1% June 2026 June 17 Interest 51.96 8.74% Aug. 2026 June 17 Interest 0.35 8.74% Aug. 2021 June 17 Interest 0.24 8.74% Aug. 2019 June 17 Interest 0.49 9.0996% June 2019 June 18 Interest and principal 622.96 10.7% June 2021 June 18 Interest 9.63 8% June 2020 June 23 Interest 120 10.7% June 2024 June 24 Interest 26.75
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