DHFL bonds back in secondary markets with 67% yield

dividend_distributionMUMBAI: About Rs 50 crore worth of DHFL bondschanged hands in the secondary market this week after a long gap, said two industry veterans with direct knowledge of the transaction, although the deal was struck at a likely record discount to the original issue.

The 9.25 percent paper was traded at 67 percent yield, perhaps a record high in recent years for any corporate paper in the country. Bond yields and prices move in opposite direction.

The secondary market trade took place late in the afternoon on Tuesday.

“A British bank is said to have bought the paper, while a mid-sized domestic insurer sold it,” said one of the persons cited above.

These bonds were sold in September, 2016, in a public issue that had also seen participation from retail investors. These bonds are due to mature in 2023.

Last September, these bonds had traded at 11 percent when DSP Mutual Fund sold some of the paper to a large non-banking finance company, backed by a large conglomerate.

DHFL Tuesday 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 Rs 862 crore from the proceeds of stake and portfolio sales.

The repayment may have revived hopes overseas about the viability of DHFL, said an investor holding papers issued by the embattled home financier. “This has triggered secondary market trading, which may increase traded volumes in the coming days,” the person said.

Wadhanwan Global Capital, the holding company, received Rs 2,200 crore Monday from selling stake in Aadhar Housing Finance, a group company.


Author: Loki