Future Retail defaults bond repayment

Shares of Future Retail fell 5% in Thursday’s trade after the rating agency Standard & Poor’s (S&P) said the retailer missed a Rs 100-crore ($14 million) repayment on its $500-million foreign currency bonds.
The company failed to make a coupon payment of about $14 million for its $500-million senior secured notes due on July 22, 2020. Technically, a payment default has not yet occurred under the indenture governing the notes, which provides a 30-day grace period.

Meanwhile, the rating agency considers downgrading the company to default rating ‘D’ if it fails to repay in the 30-day grace period.
Future Retail said it is not in discussion with any of its lenders to renegotiate lending terms, except seeking moratorium as per the terms of the RBI circular.
At present, Future Retail is rated ‘CCC-’, which is a speculative-grade rating. It may face increased liquidity pressure for the next month amid depressed operating cash flows and delays in disbursement of credit lines from banks

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