Crisil downgrades DHFL's commercial papers to 'default' grade

Rating agency Crisil on Wednesday downgraded commercial papers (CP) of troubled Dewan Housing Finance Corporation Ltd (DHFL), citing delays in debt servicing. Crisil downgraded the CP of the housing finance firm to 'D' (Default) from 'A4+', it said in a release.

DHFL has Rs 850 crore of outstanding CPs of which Rs 750 crore is due in June, the rating agency said. "The first CP maturity is on June 7, 2019. With liquidity inadequate as on date to service debt and visibility very low on timely fundraising, CRISIL expects the CP to be in default on maturity," the release said.

The downgrade comes after reports of default by the company in paying interest to the tune of Rs 900-1,000 crore of NCDs, which were due on June 4. "The downgrade reflects delays in debt servicing by DHFL on some of its non-convertible debentures (NCDs) not rated by CRISIL because of inadequate liquidity. The payments were due on 4 June," Crisil said.

DHFL officials were unavailable for comments. In May, too, Crisil had downgraded its rating on DHFL's commercial papers to 'A4+' from 'A3+', citing more- than-expected reduction in the company's liquidity...

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