(Bloomberg) — Investors uneasy about billionaire Gautam Adani’s business empire have seen some of his company’s bonds yield above 10%.
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Adani Ports & Special Economic Zone Ltd., which plans to pay a total of $24.7 million in interest on its $3 bonds today, has seen yields on two bonds soar into double digits, according to prices compiled by Bloomberg. are all priced at about 63 cents on the dollar, which is pretty tight territory.
On Friday, a $10 million coupon will be paid on one of Adani Transmission Ltd.’s dollar-denominated bonds. That yield jumped a whopping 400 basis points to 13.5% this week.
Adani Ports is India’s largest private port operator with a 30% market share and has the strongest credit fundamentals among Indian billionaire portfolios, according to CreditSights Inc. analysts. But despite the company’s investment-grade rating, which is the lowest of any major rating agency, its bond yields fell short of a scathing report last week by US-based Hindenberg Research. It has since surged, well above the 8.5% global Bloomberg index for junk. bonds.
Below is a list of interest payments on dollar-denominated bonds due in the next few days.
The short seller accused the Adani conglomerate of “brazen” stock manipulation and accounting fraud. The group countered in his 413-page response, an allegation that they were unable to stem the rout. Since the report was published, the company’s market capitalization has lost more than $100 billion. This is his one of the greatest wipeouts in Indian history.
The rout worsened after Adani Enterprises Ltd. decided not to make a public offering of shares. Returning funds to participating investors. His Mark Mobius, a veteran emerging market investor, said his firm held off on selling its shares due to concerns over the Adani empire’s debt. Meanwhile, Citigroup’s wealth division has stopped accepting securities related to Adani, as has Credit Suisse Group.
While short-term dollar-denominated bonds are unlikely to default, “access to funding and pricing in both the capital and loan markets will be tested following this short report,” said CreditSights. Analysts Lakshmanan R., Rohan Kapur and Jonathan Tan write: note. “To be clear, we do not expect the Group loan market to close, but access/pricing could become relatively difficult.”
–With help from Abhinav Ramnarayan.
(Mark Mobius updates with a stock sale in the penultimate paragraph. A previous version of this article was corrected to show the yield on the chart.)
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