Reliance Home Finance extends Rs 400 cr NCD's maturity

Housing finance company Reliance Home Finance Ltd on Saturday said the maturity of certain non-convertible debentures (NCD) totalling Rs 400 crore has been extended till October 31.

In a statement issued here, the company said the extension of the maturity date has been done with the formal written consent of the debenture trustees and NCD holders concerned.

Meanwhile group company Reliance Mutual Fund said the Rs 400 crore NCD were held by few of its schemes. The interest on the NCD was paid by Reliance Home Finance and the maturity date has been extended till October 31 with additional cover and coupon.

According to Reliance Home Finance, extension of maturities by mutual consent is a recognised global practice to deal with severe dislocations in capital markets, and does not, in any sense, constitute a default.

"The extension of maturity has been made purely to address timing mismatches in receipt of proceeds from the ongoing monetisation of retail asset pools of the company," it said.

Reliance Home Finance has already monetised over Rs 5,000 crore of retail assets, and will continue to do so to meet its debt servicing obligations.

"The housing finance sector is dealing with an extraordinary situation where all categories of lenders in the country have completely frozen new lending to private sector companies for nine long months, leading to a severe adverse impact on economic growth and a potential systemic threat to the stability of the Indian financial system," the statement added.

On its part, Reliance Mutual Fund said: "In order to safeguard investors interest, we have taken adequate measures along with enhanced security."

As per regulatory guidelines prescribed by SEBI, provisions have been made and the fund has marked-down its investments in the securities issued by Reliance Home Finance, it added.

These provisions may/may not result in actual losses subject to the obligations being repaid in the future, the mutual fund said.

The Reliance Mutual Fund, the securities issued by Reliance Home Finance were earlier rated as 'C' by CARE Ratings.

"In line with the latest development and regulatory guidelines, we have further marked down the securities issued by RHF (Reliance Home Finance)," Reliance Mutual Fund said.

According to the fund house, owing to the provisions the impact on the net asset value (NAV) of 19 of its schemes would range between 0.87 per cent to 2.10 per cent. IANS