Oaktree Cap’s rating claims under Sebi lens
MUMBAI: The stock market regulator has asked lenders to Dewan Housing Finance Ltd (DHFL) for details on the credit rating claims raised by Oaktree Capital in its bid for the bankrupt mortgage lender, two people aware of the matter said.
The private equity firm recently wrote to DHFL’S committee of creditors that according to views from some credit rating agencies, non-convertible debentures worth ₹21,000 crore that DHFL will issue under its ownership will have better credit ratings than those proposed by rival Piramal group.
According to the people cited above, who spoke on condition of anonymity, the Securities and Exchange Board of India (Sebi) has asked the DHFL administrator for names of the credit rating agencies cited by Oaktree, since offering any such views or ratings grade or outlook on future plans or instruments would be a violation of its regulations on credit rating agencies. Sebi also wants to know the stance taken by lenders in this respect. The regulator stepped in after being alerted by an anonymous complainant, the people cited above added.
Mint has reviewed a copy of Sebi’s letter.
In its letters to the COC on December 22 and 24, Oaktree had said its NCDS have favourable characteristics, mentioning that “Based on feedback from multiple rating agencies, we believe DHFL post-oaktree’s implementation plan would receive a AAA rating given its 100% retail focus and superior ALM profile vs. peers. NCDS are backed by DHFL loan assets only and not co-mingled other assets that have not been diligenced, in a clean Dhfl-only entity with no other lenders.” Mint has reviewed a copy of this letter.
“We believe DHFL post-oaktree’s implementation plan would receive a AAA rating given its 100% retail focus, superior ALM profile vs. peers and ample capital adequacy. As against this, an entity (Piramal Capital and DHFL merged) that has comingled wholesale and retail assets would have a rating of AA or lower,” the Oaktree letter said.
An Oaktree spokesperson declined to comment.
Meanwhile, financial group Enam has informed Oaktree that it is no longer interested in being a part of the transaction as an Alternate Investment Fund proposed by Oaktree.