Deal with Security Bank to pare 8990 receivables
Mass housing developer 8990 Holdings yesterday signed a deal to sell P2 billion worth of receivables under its in-house financing program to Security Bank Corp.
This is in line with the developer’s goal to pare its contract-to-sell (CTS) receivables to end the year with a lighter portfolio of P10 billion.
For Security Bank, this is a way for it to fast-track the expansion in its consumer lending business.
8990 Holdings signed a memorandum of agreement (MOA) with Security Bank for the unloading of CTS receivables under the group, which also include those of 8990 HDC, 8990 Luzon, 8990 Davao as well as Fog Horn.
“The agreement with Security Bank signifies a serious interest for banks to partner with 8990 and establish for the mass housing sector a viable alternative for housing finance in the Philippines,” 8990 Holdings president Januario Jesus Atencio III said.
“For 8990, the purchase of our receivables indicates the growing satisfaction and confidence of banks in the quality of our buyers, our credit evaluation procedures, and our credit and collection platform,” he added.
8990 Holdings expects the actual sale to take place in April after Security Bank’s due diligence on the portfolio.
Under the agreement, the purchase value will be based on the outstanding principal balance. The receivables must be “seasoned” or with track record for at least 12 months and have had no past due experience in the past 12 months.
As part of the deal, 8990 Holdings has agreed to act as collection agent for Security Bank and will be paid 3.5 percent in collection service fee based on collected amount.
Atencio said 8990 Holdings would pursue similar arrangements with other banks and financial institutions.
Last October, 8990 Holdings also signed a deal with BPI Family Savings Bank to unload CTS receivables worth P1 billion.
Under the CTS program, homebuyers are required to shell out at least 4 percent equity with a five-year rebate of 1.5 percent for prompt payment. Effective interest rate is 9.5 percent per year.
Qualified homebuyers are those earning at least P35,000 monthly while monthly amortization cap is equivalent to 33 percent of salary.
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