(Bloomberg) -- The dollar bonds of Adani Group companies slid, reversing their earlier gains on news a major Swiss bank stopped accepting the debt issued Indian tycoon Gautam Adani’s empire as collateral for for margin loans. 

Two notes by Adani Ports and Special Economic Zone Ltd. were on course for their biggest declines in a week, and just one of the conglomerate’s 15 dollar bonds was still positive as of 6:51pm in Hong Kong on Wednesday.

The Adani Ports bond due in 2031 led the declines, down more than 4 cents on the dollar to 68 cents, while the firm’s bond maturing in 2041 fell 3.2 cents, according to Bloomberg-compiled data. 

The declines took place after Bloomberg reported that Credit Suisse Group AG stopped accepting bonds of Gautam Adani’s group of companies as collateral for margin loans to its private banking clients. 

The news “is souring sentiment again on Adani group companies,” said Deven Choksey, managing director at KR Choksey Holdings Ltd.

The slide constitutes a reversal from the gains recorded earlier in the session, when as many as 13 of the group’s US currency notes were climbing, buoyed by news the empire backed by Asia’s richest man, Gautam Adani, had sold $2.5 billion worth of shares in a fully subscribed follow-on offering. 

The equity sale followed days of scrutiny after US short seller Hindenburg Research levied accusations of corporate malfeasance. Adani Group has denied the charges.  

“Bond investors may be constructive about the fundamentals of the Adani bonds as the underlying business should still be sound,” Willem Glorie, portfolio manager at LGT Capital Partners said about the bond gains earlier in the day, at a time when the group’s equities were already dropping. 

“For Adani Ports, its fundamentals are quite solid and it has a strategic asset base, that hasn’t changed after the shortseller report,” he said. 


--With assistance from Lorretta Chen.

(Writes through after bonds decline)

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