Listed mass housing firm 8990 Holdings Inc announced Friday its signing of “the largest securitization [deal] under the Philippine Securitization Act” pegged at $107.2 million or P5 billion.
The company has tapped China Banking Capital, a subsidiary of China Banking Corp, to arrange and underwrite the securitization of the P5 billion worth of contract to sell receivables to a special purpose company (SPC) of the bank, which will then issue three tranches of asset-backed securities (ABS) to investors.
The SPC shall use the cash flows from the receivables to make principal and interest payments to the ABS investors until each tranche is completely paid in order of seniority.
The transaction is seen to monetize 8990’s receivables portfolio for the company’s further expansion.
“This is a trailblazing moment for 8990 as well as the mass housing sector. The 5 billion securitization mandate given to China Bank is the largest securitization deal ever to be assembled in the Philippines and it opens up a whole new horizon for housing finance in the country,” said 8990 president and chief executive officer Januario Jesus Atencio.
8990 chairman Mariano Martinez signed the mandate with China Bank Capital Corp President Romy Uyan Jr, and director Manolo San Diego, for the first purely private sector and largest housing securitization deal in the country.
“The contemplated transaction will be undertaken pursuant to a securitization plan to be submitted to the Securities and Exchange Commission for approval,” 8990 Holdings said in a statement.
Only last March 16, the holding firm closed a deal to sell P2 billion worth of in-house CTS receivables with Security Bank Corp. In October 2015, 8990 Holdings signed an agreement with BPI Family Savings Bank for the purchase of its CTS receivables worth P1 billion.