BIZ-ILFS-DOWNGRADES


PTI | Mumbai | Updated: 16-10-2018 20:17 IST | Created: 16-10-2018 20:17 IST
  • Country:
  • India

Crippled IL&FS group faced

Tuesday more embarrassments after India Ratings downgraded its

various mutual fund schemes and placed them on a rating watch

negative (RWN).

The agency downgraded three series-1, three series- 2

and two series -3 mutual fund schemes of the group, "due to

the deterioration in the underlying portfolio quality of the

schemes due to its exposure to IL&FS group entities.

The RWN reflects absence of clarity on the resolution

of the above referred assets in the portfolio due to the poor

financial profile of the sponsor group, which IL&FS, it said.

All IL&FS IDF schemes generally have an exposure of

around 23.55 per cent in group companies --IL&FS Solar Power

and IL&FS Wind Energy, whose credit profile has weakened.

IL&FS and its group companies are facing liquidity

crisis and had defaulted on debt repayments.

The rating agency said the ratings do not factor in

the expectation of the default risk for the scheme itself, as

a fund/scheme generally cannot default.

"The ratings should be interpreted as an opinion about

the strength of the fund's investment policies, the expertise

and experience of the sponsors and investment managers, and

the scheme's vulnerability to severe losses," it said.

The ratings also do not address the risk of a loss due

to changes in the prevailing interest rates, credit spreads

and other market conditions, the agency said, adding the

comments on the adequacy of market value to address the extent

to which fund expenses and costs may reduce distributions to

unit holders.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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