Franklin Templeton Wound-Up Schemes Receive Rs 3,275 Crore Since Closure
The six wound-up debt schemes of Franklin Templeton Mutual Fund have received Rs 3,275 crore from maturities, pre-payments and coupon payments since shutdown in April, the fund house said on Monday.
This includes the Rs 1,252.44 crore that Vodafone Idea Ltd. repayed last week.
"From June 16, 2020 to June 30, 2020, the schemes have received an additional Rs 1,311 crore from maturities, pre-payments and coupon payments. This takes the total amount received since April 24, 2020, to Rs 3,275 crore," Sanjay Sapre, president at Franklin Templeton Mutual Fund, said in a letter to investors.
Franklin Templeton shut six debt mutual fund schemes on April 23, citing redemption pressure and lack of liquidity in the bond market.
With regard to concerns over decline in net asset value of some of the funds, Sapre said this is the result of a maturity date reset for the securities of Edelweiss Rural & Corporate Services Ltd. "The impact on the NAV is due to valuation provided by the valuation agencies due to reset of maturity date to the next rate reset date (June 30, 2022)," he said.
Independent valuation agencies typically value these interest rate reset securities considering the next interest rate reset date as the maturity date, Sapre said, adding that Franklin Templeton is continuously monitoring the developments in this regard and engaging with the issuer for early repayments.
He also said that winding-up of a scheme does not mean there has been any kind of write-off of investments made by the schemes.