Tata Asset Management Company Ltd. has taken a decision to set apart its investments in Dewan Housing Finance Corporation Ltd. from the rest of its portfolio as credit rating agencies downgraded the home financier’s debt papers to default.
The asset manager is the first to use side-pocketing or the mechanism to separate distressed and illiquid assets from other more liquid assets in a portfolio after the market regulator allowed it last year. It proposed to separate the securities of DHFL that the mutual fund house held in Tata Corporate Bond Fund, Tata Medium Term Fund and Tata Treasury Advantage Fund schemes, it said in a statement.
Crisil Ratings and ICRA Ltd. downgraded DHFL’s commercial paper to default, citing delays in debt servicing by the home financier on some of its NCDs because of inadequate liquidity. CARE Ratings downgraded all outstanding borrowings of the mortgage lender to default.
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