Mumbai: Domestic rating agencies Icra and Crisil on Wednesday downgraded rating on Rs 850 crore worth of commercial paper of Dewan Housing Finance Corporation (DHFL) to 'default' from 'A4' due to the mortgage lender's deteriorating liquidity condition. The rating of the company, which defaulted on a debt repayment earlier this week, has been removed from watch with negative implications by both the rating agencies. Crisil, in a note, said the downgrade to 'default' or 'D' reflects delays in debt servicing by DHFL on some of its non-convertible debentures (NCDs) because of inadequate liquidity. The payments were due on June 4, 2019.
The NCDs are not rated by Crisil. In a separate note, Icra said, "The rating revision factors in further deterioration in company's liquidity profile and delays in meeting scheduled debt obligation on June 04, 2019." Icra added that given the stretched liquidity profile and limited visibility on fresh funding, the company is unlikely to be able to service its debt obligation with regard to commercial paper programme in a timely manner. The company has commercial paper (CP) worth Rs 750 crore maturing in June 2019 with the first repayment on June 7.
