After Crisil, ICRA Cuts Rating Of DHFLs ₹850-crore CP

A day after Crisil Ratings downgraded commercial paper worth ₹850 crore of housing finance company Dewan Housing Finance Corporation (DHFL), rating agency ICRA has followed suit.
Driven by the weakening liquidity conditions at DHFL, ICRA has downgraded the company’s ratings for Purchaser Payouts/Pass Through Certificates (PTCs) issued under six mortgage loan pools originated by the housing finance company.
Giving the rationale on the downgrade, ICRA said in a report: “The ratings for these transactions continue to be on watch with developing implications.
“The pools comprise receivables from housing loan contracts. The receivables have been assigned to the respective trusts at par.”
It also said that the performance of the above-mentioned pools has been strong till March 2019 collection month, evidenced by healthy collection efficiency and low delinquency levels. ICRA has revised the rating on the commercial paper programme of DHFL from A3+ ‘Watch with Negative Implications’ to A4 ‘Watch with Negative Implications’.
Crisil Ratings has also downgraded the commercial papers to A4+ from A3+. Its rating also continues to be on ‘Rating Watch with Negative Implications’.
The mortgage lender’s liquidity dropped to ₹2,775 crore as of April-end. Its scheduled aggregate cash outflows (including loan repayment and securitisation payouts) till July 2019 remains high at ₹8,400 crore.
The rating action comes even as it paid ₹838 crore as interest and principal on its non-convertible debentures issued on private placement basis to assuage fears of another default. The company had also said that since September last year it has made more than ₹30,000 crore of principal and interest payments to its creditors, including its fixed deposit holders.
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