Blackstone money awaited to avert shadow lender default

By Divya Patil and Baiju Kalesh

Investors in rupee corporate bonds are waiting to see whether a major Indian shadow lender will repay 1.25 billion rupees ($18 million) of bond payments due this month, and help avoid a further worsening in sentiment in the nation’s credit markets.

Dewan Housing Finance Corp. is already behind schedule in meeting debt obligations as it missed paying 9.6 billion rupees of interest that was due on Tuesday on bonds, a company official said, adding that the debt would be serviced in the next seven days. The home financier is expected to get money from Blackstone Group LP on Monday from a previously agreed group unit sale.

That will help the lender repay obligations during the so-called cure period of seven days, and also other maturities that will be up for redemption.

Timely repayment by Dewan Housing will help allay wariness in the nation’s credit markets, where infrastructure financier IL&FS Group’s default last year has prompted investors to stay away from debt of shadow lenders. The funding crunch in the shadow banking sector could weigh further on Indian economic growth, which has already slowed to a five-year low, as borrowers find it harder to raise cash.

Credit market stakeholders will be watching out for following payments for Dewan Housing.

Security	Servicing Date	Obligation	Amount due (in million rupees)
9% June 2019	June 10	Interest and principal	190.75
9% June 2026	June 10	Interest	15.75
10.7% June 2024	June 10	Interest	21.4
10.7% June 2021	June 10	Interest	16.05
10.7% June 2024	June 12	Interest	58.85
8.93% Aug. 2026	June 17	Interest	3.31
8.83% Aug. 2019	June 17	Interest	1.2
8.88% Aug. 2021	June 17	Interest	7.96
9.1% June 2021	June 17	Interest	51.96
9.1% April 2020	June 17	Interest	45.5
9.1% June 2026	June 17	Interest	51.96
8.74% Aug. 2026	June 17	Interest	0.35
8.74% Aug. 2021	June 17	Interest	0.24
8.74% Aug. 2019	June 17	Interest	0.49
9.0996% June 2019	June 18	Interest and principal	622.96
10.7% June 2021	June 18	Interest	9.63
8% June 2020	June 23	Interest	120
1.7% June 2024	June 24	Interest	26.75