UTI Mutual Fund will create a segregated portfolio in two schemes that hold debt securities of Zee Learn. The debt securities have been downgraded from AA to B (below investment grade) by CARE Ratings on July 7.
The securities will be segregated from portfolios of UTI Credit Risk Fund which holds 9.24% of Zee Lear worth Rs 40.77 crore and UTI Medium Term Fund in which it holds 3.02% valued at Rs 3.04 crore.
In a note to investors, the fund house said that the above securities were rated AA(SO) by CARE Ratings Limited on March 12, 2015, on the basis of an unconditional and irrevocable undertaking from Zee Entertainment Enterprises Ltd (rated CARE AA/ A1+ on September 11, 2014) for funding of a Debt Service Reserve Account (“DSRA”) to cover any shortfall in servicing outstanding obligations of the said securities 7 days prior to the due date as per the repayment schedule.
Existing investors in the above mentioned schemes, as of the day of creation of the segregated portfolio, shall be allotted an equal number of units in the segregated portfolio as those held in the main portfolio. No subscription or redemption will be allowed in the segregated portfolio of the captioned schemes, the fund house said.