The onslaught of sudden downgrades of rated papers has made mutual funds suffer earlier in Global Liquidity crisis of 2008 when they approached SEBI for non-saleable short term debt papers. That time SEBI stepped in for higher flexibility in debt paper valuations, on a temporary basis, of more than 300 basis points to help reflect the current value of debt holdings for mutual funds, said the ex-SEBI official. Further RBI had to help mutual funds providing a borrowing window of Rs 20,000 crores to help tide over panic redemptions, said the official. … [Read more...] about WRAP: Is credibility of rating agencies under a cloud?
Kotak Mahindra Asset Management Company followed soon after, writing to the investors of Kotak FMP Series 127 that it will not be able to pay the entire redemption amount. The scheme, a three-year fixed maturity plan (FMP), was to mature on April 8. This happened because of Kotak’s exposure to debt-laden Essel Group, the promoter of the Zee group of companies. There are 94 FMPs that have invested in Essel Group companies, according to Morningstar data. … [Read more...] about Will the debt crisis lead to exodus of top talent from MF industry?