COMPLIANCE WITH REGULATION 30 OF SEBI (LODR) REGULATIONS, 2015 - NON FUNDING OF 6TH SEMI ANNUAL INTEREST PAYMENT IN ESCROW ACCOUNT MAINTAINED IN BANK OF INDIA WRT MTNL BOND SERIES VIID (INE153A08139)
MTNL · price
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MTNL has informed the exchanges that it could not fund the escrow account maintained in Bank of India for the 6th semi-annual interest payment on its 7.80% MTNL Bond Series VIID (INE153A08139), which is due on 24 February 2026. Under the Tri-Partite Agreement, MTNL was required to deposit the interest amount into the escrow account 10 days before the due date. The company cited insufficient funds as the reason for not funding the escrow. The bonds are sovereign-guaranteed by the Government of India, meaning the Debenture Trustee can invoke the sovereign guarantee and GoI is obliged to step in and make the payment on MTNL's behalf in case of default.
While bondholders are protected because these are sovereign-guaranteed bonds and GoI will ultimately pay, this disclosure highlights serious liquidity stress at MTNL as the company itself cannot even pre-fund scheduled interest. This is a negative signal on MTNL's standalone financial health, though the direct impact on bondholders is cushioned by the government guarantee.