Monitoring and Disclosures by Debenture Trustee(s)
Summary
This circular mandates debenture trustees to conduct independent periodical assessments of covenant compliance and security creation for listed debt securities. It prescribes specific monitoring procedures, including the incorporation of terms in trust deeds and the submission of asset cover certificates and other reports to stock exchanges within defined timelines. Additionally, it requires trustees to disclose certain information on their websites and submit revised periodic reports to SEBI while rescinding previous reporting formats. This section details the ISIN-wise information regarding debt securities and their charge status. It includes a table defining the calculation for the Assets Coverage Ratio using net assets and total unsecured borrowings. The text further outlines compliance with issue covenants and provides structured annexures for credit rating revisions, payment statuses, and debenture trustee monitoring. This section details the maintenance status of Debenture Redemption Reserves, recovery expense funds, and municipal debt securities accounts. It outlines the reporting requirements for any defaults by listed entities and the subsequent actions taken by the deben
Text
Debenture trustee(s) shall undertake independent periodical assessment of the compliance with covenants or terms of the issue of listed debt securities including for ‘security created’.
Debenture trustee(s) shall carry out due diligence on continuous basis as required under Regulation 15(1)(s) & 15(1)(t) of DT Regulations.
Debenture trustee shall incorporate the terms and conditions of periodical monitoring in the debenture trust deed wherein listed entity shall be liable to provide relevant documents/ information.
Asset cover Certificate must be submitted Quarterly within 60 days; Net worth certificate Half-yearly within 60 days; Financials Annual within 75 days.
For existing debt securities, listed entities and debenture trustee(s) shall enter into supplemental/amended debenture trust deed within 120 days from the date of this circular.
In case a listed entity has more than one debenture trustee, then debenture trustees may choose a common agency for preparation of asset cover certificate.
In case of breach of covenants or terms of the issue by listed entity, the debenture trustee shall take steps as outlined in para 6.1 and 6.3 of SEBI Circular... and thereafter take necessary action as decided in the meeting of holders.
The debenture trustee(s) shall make disclosures on their websites including revision in credit ratings, status of payment, monitoring of asset cover, and complaints received.
The formats for periodical reporting prescribed by SEBI Circular No. CIR/MIRSD/25/2011 stands rescinded and the debenture trustee(s) shall furnish revised periodical reports to SEBI.
Half yearly compliance report and details of other activities carried out by Debenture Trustee(s) including type and description of activity.
This circular is issued in exercise of the powers conferred upon SEBI under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with various regulations.
The provisions of this circular shall come into force w.e.f. quarter ended December 31, 2020 for listed debt securities.
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Source: SecMarx — Monitoring and Disclosures by Debenture Trustee(s). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.