The Rs. 630 crore bonds held in about 5 schemes of Franklin Templeton Mutual Fund was about to break or already broke the minimal Three occasions the quilt stipulated within the transaction settlement that led to the top-up of collateral, mentioned these individuals who didn’t need to be recognized.
Covenants counsel that the worth of Yes Bank shares be at the very least Rs. 1,890 crores, in accordance to transaction abstract supplied by Templeton. The worth of seven.56 crore shares as a safety cowl is Rs. 1,222 crores primarily based on Wednesday’s inventory worth. Yes Capital has supplied additional Rs. 208.9 crores as money collateral.
Whenever there’s a breach of covenant, Yes Capital has 14 days to meet its collateral obligations, the doc exhibits. Yes Bank shares are down greater than 60 % this yr from its peak of Rs. 404.
“This is a extremely rated, brief maturity funding (construction consists of rate of interest reset choice in Mar 2019) with 3X cowl, and there was no breach of any covenants for these NCDs,’’ Templeton mentioned in a press release.
Collapse in shares of Yes Bank over the previous few weeks has triggered worries about mutual fund investments within the non-convertible debentures of holding Companies of Kapoor. Bonds of Yes Capital and Morgan Credits are in focus as borrower has to high up to constantly meet the quilt. Franklin Templeton and Reliance Mutual Fund personal substantial parts of the bonds bought by these two Companies.
Morgan Credits Pvt. Ltd. and Yes Capital (I) Pvt. Ltd. are holding Companies owned 100% by Radha Ok Khanna, Raakhe Ok Tandon and Roshini Kapoor (Three daughters of Kapoor.
“To tackle their development goals, Morgan Credits and Yes Capital have raised some debt which is effectively inside their eligibility limits,’’ mentioned a press release from Three Sisters, a start-up enterprise owned by Kapoor’s three daughters. “MCPL and YCPL have always complied with all covenants of such debt together with servicing obligations and can proceed to accomplish that.”
Morgan Credits Pvt Ltd, which owns 3.04 per cent in YES Bank, has raised Rs 1,160 crore from sale of debentures most of which is held by Reliance Mutual Fund. One of the covenants is that there must be two occasions cowl for these debentures, i.e., the worth of collateral. This was rated by Care Ratings of CARE A- and bears a steady outlook.
Morgan is alleged to have pre-paid about Rs 200 crore and on the similar time introduced in Rs 500 crore further collateral, mentioned one of many individuals cited above.
“We do not comment on specific investments,’’ said a Reliance Mutual Fund spokesman. “There are numerous holding company borrowings by issuers from India’s top business houses with similar structures, and all the large asset managers regularly invest in these holding Companies / CICs. This has been standard industry practice for years.”