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Business News/ News / India/  Adani bonds worth $1 billion find buyers in international special situation funds: Report
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Adani bonds worth $1 billion find buyers in international special situation funds: Report

The bonds owned by these funds now total around $1 billion.

Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. REUTERS/Amir Cohen (REUTERS)Premium
Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. REUTERS/Amir Cohen (REUTERS)

In the days following the release of the Hindenburg report on January 24, a number of international special situation funds, including high-yield and distressed-debt experts, purchased sizable sums of foreign currency bonds from Adani Group companies.

The bonds owned by these funds now total around $1 billion, sources at The Economic Times revealed. Livemint could not independently verify the developments.

US hedge funds Baupost Group and Silver Point Capital, with varied maturities, are among the firms that have invested, and the majority of the purchasing has taken place in Special Economic Zones, ET sources said.

Additionally, they consist of the special circumstance funds run by Oaktree Capital, SSG Capital, Broad Peak Capital, and Varde Partners, ET sources added.

The majority of transactions have already taken place, and the supply has significantly decreased, revealed one of the sources while mentioning that big bond houses have been the main sellers as they pulled out when the yield jumped. Since such bonds frequently have weak liquidity in the regular course of business, these transactions are essentially pre-negotiated, but investors with higher risk tolerance can plainly sense a trade, the ET source added.

Also Read: Adani Group still eligible to be part of influential JPMorgan bond indexes

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

The decision was made 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 the Adani securities. The Adani group has always refuted the accusations made by the short seller.

Also Read: Adani Ports remains part of NSE's F&O ban stock list for today

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

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Sounak Mukhopadhyay
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Published: 07 Feb 2023, 09:01 AM IST
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