YES Banking crisis: Indiabulls Housing moves court to obtain compensation on AT1 bonds

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Indiabulls Housing Finance seized the Bombay High Court on Monday, seeking relief on YES Bank’s additional Tier 1 (AT-1) bonds which will be written down when the Reserve Bank of India (RBI) completes the rebuilding of the private lender.

Indiabulls Housing has an exposure of Rs 662 crore to YES Bank AT-1 bonds.

An email query sent to Indiabulls Housing Finance has not elicited a response at the time of going to press.

According to court documents, the case was raised on Monday. The plea will be pummeled with the petition filed by Axis Trustee, which represents the majority of bondholders.

YES Bank, in an exchange statement, said AT1 bonds totaling Rs 8,415 crore will be fully depreciated, with immediate effect.

Previously, bondholders acting through Axis Trustee tried to negotiate the case out of court. They proposed converting bonds into stocks, which would lead to an 80 percent haircut on their exposure, instead of the 100 percent markdown.

Infrastructure giant Larsen and Toubro (L&T) as well as agents from L&T and the Supervisory Staff Provident Fund (PF) have also moved the court separately. L&T has an exposure of Rs 100 crore to the bank’s AT-1 bonds, while the PF has an exposure of Rs 25 crore.

Overall, employee provident funds – which manage employee retirement money – have Rs 237 crore exposure to YES Bank’s AT-1 bonds, according to industry estimates. Mutual funds (MF) exposure to bonds stood at Rs 2,674 crore as of February 29, according to data from primemfdatabase.com

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