Latest news with #repayments
Reuters
a day ago
- Business
- Reuters
India's SBI seeks senior creditor status for NHAI investment trust to stave off default concerns, sources say
MUMBAI, July 15 (Reuters) - State Bank of India ( opens new tab is seeking senior creditor status to gain early rights on repayments in case of default or liquidation of the state-owned road authority's investment trust (InvIT), two sources aware of the matter told Reuters. The lender, the country's largest, has written to the National Highway Authority of India (NHAI) seeking this status on its investments in National Highways Infra Trust (NHIT), the sources said on Monday. An InvIT is an investment vehicle that raises funds by issuing units. NHIT is the manager of NHAI's InvITs. The sources requested anonymity as the talks are private. SBI, NHAI and NHIT did not reply to a Reuters mail seeking comment. The move follows NHAI's plan to raise 200 billion rupees ($2.33 billion) by monetising its road assets through InvITs, according to Mint, a business daily. It has already raised 460 billion rupees through four rounds of InvITs since 2020, including a 183-billion-rupee round in March, opens new tab, India's biggest road monetisation exercise to date. SBI has significant exposure to India's road sector including projects backed by NHAI's InvITs. In 2018, it signed, opens new taban agreement with NHAI for a 10-year loan unsecured loan of nearly $3 billion. Under current rules, InvITs are not governed by India's bankruptcy laws, and typically, the unitholders of these trusts hold priority in the repayment hierarchy, one of the sources said. SBI has flagged the lack of creditor protection under these regulations for quite some time, the source added. "The lender is not at all happy with the arrangement and has been discussing the tweaks," the second source said. As part of the monetisation, NHAI transfers the ownership and operational responsibilities of completed highway stretches to the InvIT, which issues units to investors who are paid from the toll revenues. InvITs are regulated by the Securities and Exchange Board of India, the country's capital markets regulator. The total assets under management of five listed and 16 unlisted InvITs in India exceeded 7 trillion rupees as of March-end, according to data from Bharat InvITs Association. ($1 = 85.8430 Indian rupees)
Yahoo
19-05-2025
- Business
- Yahoo
Surprise interest rate move many Aussies are making: 'Save $66,580'
Australia's largest home loan lender has revealed the surprising number of homeowners who leapt at the opportunity to reduce their repayments after February's interest rate drop. It was the first bit of mortgage relief since the Reserve Bank's (RBA) rate hike cycle, which saw the cash rate jump more than a dozen times. You'd think that high interest rates teamed with a cost-of-living crisis, there would be a huge uptick in the number of repayment reduction requests. However, Commonwealth Bank (CBA) found only 14 per cent of eligible customers asked for a decrease after the February 18 RBA meeting. 'For those who did not reduce their direct debit repayments, they may now be making additional repayments on their mortgage, which could help them to pay off their loan faster,' CBA's Home Buying Executive General Manager, Michael Baumann, said. Economist issues dire RBA interest rate hike warning: 'Back in play' Daunting retirement 'squeeze' about to hit generation of Aussies: 'Hidden cost' Money crisis sparks capital city exodus as Australians embrace 'new frontier' 'These additional payments will also increase the available balance of their loan accounts and customers may have the flexibility to redraw the available balance at any time, for example, if they experience an unexpected cost.' Eligible customers were those who weren't paying the lowest amount possible for their loans. Those on the absolute minimum repayments would have had their direct debits automatically reduced following the RBA's decision to lower the cash rate from 4.35 per cent to 4.10 per cent. Anyone paying more than the lowest amount had to contact their bank via the app, call or visit a branch in person to request a repayment reduction. Someone with a $500,000 mortgage would have seen around $80 in savings per month as a result of that move from the central expert Ben Nash told Yahoo Finance that it could work out in your favour in the long run if you kept your repayments where they were at before the February RBA meeting. "There's no doubt that some people have been struggling to make ends meet, and they are looking at the extra money that's there. "But if your budget is balanced and you can afford to do something with the money, then it will be good to do that." Nash used an example of a $711,000 loan and said just one 0.25 per cent rate cut would result in $110 per month in savings. But if you didn't change the amount you're currently paying, you could shave two years off the loan and save $66,580 in interest over the lifetime of the mortgage. "If you just bought your first home six months ago, and your mortgage is high and your cash flow is not great, then it probably is going to be more to your advantage to try and chip away at your mortgage more and pay some of that down so that you're reducing your mortgage payments," Nash told Yahoo Finance. "Whereas, if you bought your home 10 years ago and your mortgage is at a comfortable and manageable level, and your personal your cash flow is reasonably strong, then, if that was me, I would be less inclined to make extra mortgage payments and more inclined to look at how can I invest the money to actually grow and get more of a return on it." A poll of nearly 10,000 Yahoo Finance readers found that one rate cut hasn't been enough to provide much relief. Interestingly, 68 per cent said they would need at least four rate cuts to feel financially secure. The RBA is meeting this week to decide whether to hike, hold, or cut interest rates. All of the Big Four banks are expecting an interest rate cut on Tuesday, with NAB forecasting a jumbo 50 basis point cut. Nearly 90 per cent of experts interviewed by Finder believed rates would be cut again by 0.25 percentage points. Three quarters have forecasted two more cuts in the next 12 months, while more than half (56 per cent) reckon there will be a cut in July and August. 'If rates fall further, it could deliver greater total savings to eligible home loan customers," Baumann said. "As such, I wouldn't be surprised to see more home loan customers choosing to free up their cash flow by lowering their regular mortgage repayments."
