HNIs tap new ways to protect debt investments amid record fund raising

Many are looking at covenants previously available only to institutions, such as first loss default guarantees. Covered bonds also gaining in popularity

Wealthy individuals are looking at innovative ways of making sure they get their money back amid record debt fundraising. They are increasingly seeking control over cash generated from certain borrower assets or guarantees against any initial losses, according to people familiar with the matter. 

This comes at a time when funds raised through the private placement of debt instruments hit a record for the first half of a financial year, according to Prime Database’s numbers, which go back to 1995-96. 

Issuers raised Rs 3.7 trillion in the six months ended September 30. This is more than double the Rs 1.8 trillion raised