Debt issues: SEBI allows trustees to seek details from credit rating agencies

Our Bureau Updated - March 15, 2013 at 09:42 PM.

Stock market regulator SEBI has said Credit Rating Agencies (CRA) should inform the Debenture Trustees (DT) if companies issuing debentures do not share information for monitoring of credit quality.

CRAs are also expected to share information with the DT on default committed by the issuer.

DTs are also expected to provide information to CRAs of the assets backing the security is free of encumbrance and adequate to cover the liability.

Details of funds transferred to the debenture redemption reserve (DRR), depletion of DRR/ invocation of guarantee which could affect the payment of debenture obligations have to be shared with CRAs once a year.

DTs also have to report redemption details, default by issuers in payment of interest, redemption and delay in creation of security.

Details in restructuring terms of the issue, funds deployment and issuer non-cooperation on reports/ certificates/ information is expected to be shared with CRAs.

raghavendrarao.k@thehindu.co.in

Published on March 15, 2013 16:12