The two securities were held in Franklin India Ultra Short Bond Fund and Franklin India Dynamic Accrual Fund. The two debt papers were to mature in September 2020 and September 2021, respectively. However, the bond issuer pre-paid the securities in June.
The updates were disclosed in a letter to investors by FT MF.
Addressing concerns over falling net asset values (NAVs) in some of the schemes on June 30, FT MF president Sanjay Sapre said, “This is a result of a maturity date reset for the securities of Edelweiss Rural & Corporate Services. The independent valuation agencies typically value these interest rate reset securities for considering the next interest rate reset date as the maturity date,” he said.
“The impact on the NAV is due to valuation provided by the valuation agencies due to reset of maturity date to the next rate reset date (June 30, 2022),” he added.
The letter also pointed out that four of the six schemes under wind-up have managed to further bring down their borrowing levels. As of June 30, the borrowing of Franklin India Low Duration Fund stood at 7 per cent from ten per cent as of June 15.
For Short Term Income Plan, it stood at 29 per cent from 32 per cent, over the same period. For credit risk fund it was down to nine per cent, from 11 per cent.
The borrowing in Franklin India Opportunities Fund was down to 37 per cent as of June 30, from 38 per cent on June 15.