Adani bonds worth $1 billion find buyers in international special status funds: report

 

Bonds owned by these funds now total around $1 billion.

In the days following the release of the Hindenburg Report on 24 January, several international special status funds, including high-yield and distressed-debt specialists, bought large amounts of foreign currency bonds from Adani group companies.

Sources in The Economic Times revealed that the bonds owned by these funds now total around $1 billion. Livemint could not independently verify the developments.

American hedge funds Baupost Group and Silver Point Capital, with different maturities, are among the firms investing, and most of the purchases have taken place in special economic zones, ET sources said.

Additionally, they include special situation funds run by Oaktree Capital, SSG Capital, Broad Peak Capital and Verde Partners, ET sources said.

Adani Enterprises

+ Add to Watchlist

1,638.0065.60 (4.17%)

Updated - 07 February 2023

1655.35

high day

1525.05

day less

1,33,009.00

Vol (BSE)



Most of the transactions have already taken place, and supply has been significantly reduced, with one of the sources revealing that the big bond houses have been the main sellers as they exited when yields jumped. Since such bonds often have poor liquidity in the regular course of business, these transactions are essentially pre-negotiated, but investors with high risk tolerance can clearly understand a trade, the ET source said. Said.


As collateral for margin loans, Standard Chartered no longer accepts bonds issued by Adani group companies, according to an earlier ET Now report. As per the report, the lender has urged its private customers to supplement their collateral if required.

The decision was taken in response to similar actions taken by Credit Suisse Group AG and Citigroup's wealth unit after allegations of fraud from US-based Hindenburg Research rocked Adani Securities. Adani Group has always denied the allegations made by the short seller.

On 1 February, private bank Credit Suisse stopped margin lending on Adani bonds. For the notes sold by Adani Electricity Mumbai, Adani Green Energy and Adani Ports & Special Economic Zone, the private banking division of the Swiss lender provided zero loan value.