Franklin Templeton MF sidepockets Voda Idea debt following NCD downgrade

Franklin Templeton Mutual Fund (MF) has decided to create segregated portfolios (side pockets) to hold the debt paper of Vodafone Idea (VIL) separately, after the telecom company’s debentures were marked down to below-investment grade.

“(Our) board of trustees has approved the creation of segregated portfolios in Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund,” it said.

Effective from last Friday, when ratings agency CRISIL downgraded VIL’s non-convertible debentures to BB, a rating below investment grade. The earlier rating was BBB-negative. CRISIL said it was maintaining a ‘rating watch with negative implications’.