Altico Capital Bonds Traded At Yield Of 75%
Beleaguered NBFC Altico Capital saw some some of its debt securities trade at a sharp discount on Friday.
Non-banking finance company Altico Capital India Ltd., which is currently in the midst of working out a resolution plan with its lenders, saw some some of its debt securities trade at a sharp discount on Friday.
According to data available on the Bombay Stock Exchange website, Rs 175 crore worth of Altico Capital’s bonds, set to mature in November 2020, were sold at a discount in three trades. The traded price implied a yield-to-maturity up to 75.7 percent, data from the BSE shows.
Information on the sellers and buyers of the bond as part of the transactions was not available.
Altico issued the Rs 250 crore bonds on Feb. 21, 2019 at a coupon rate of 12.5 percent. The bond issue was rated ‘AA-’ by India Ratings at the time of issuance, but was subsequently downgraded by the rating agency to ‘D’ default status on September 13. The bonds had been issued on a private placement basis.
The NBFC has been in trouble since September this year after a credit rating downgrade and a default in interest payments on an external commercial borrowing facility prompted its creditors to issue loan-recall notices. This eventually led to Altico declaring that it has a liquidity problem. Since October bankers have been in talks to restructure the firm under the inter-creditor-agreement framework.
On Oct. 31, BloombergQuint reported that lenders to the real estate financier are looking at alternative restructuring options after talks with foreign funds such as Apollo Global Management LLC and Cerberus Capital Management LP fell through.
The reason for talks with potential investors falling through was that the value being offered by these two foreign funds was too low. While Apollo Global offered to take over the loan exposure at an 85 percent discount, Cerebrus Capital offered a slightly better 75 percent discount, according to people in the know. The lenders to the real estate non-bank lender declined both the offers, as these would require steep haircuts on their Rs 4,300-crore exposure to the non-banking financial company, BloombergQuint had reported.