8990 Holdings eyes P10-B securitization deal

Leading mass housing developer 8990 Holdings Inc. plans to offer to retail investors as much as P10 billion worth of securities backed by housing receivables, seen as the first housing securitization deal to be undertaken in the Philippines by a private company.

In a chance interview on Monday, 8990 Holdings chief operating officer Willie Uy said the first tranche of the securitization deal could happen in early 2018. He said the securities, with a tenor of five years, would most likely be offered to retail investors.

Proceeds from the offering would form a “major part” of the funding pipeline for 2018.

8990 Holdings plans to launch P60 billion worth of new projects next year.

The housing developer has mandated China Bank Capital to underwrite this new fund-raising initiative.

Under the proposed securitization deal, 8990 Holdings’ subsidiaries will sell contract-to-sell receivables to a special purpose company, which will then issue asset-backed securities to investors.

The special purpose vehicle will, in turn, use the cash flows from the receivables to make principal and interest payments to the investors until each tranche is completely paid in order of seniority.

The firm has to first get the approval of the Securities and Exchange Commission.

8990 Holdings’ proposed securitization is expected to be the largest deal under the Securitization Act of 2004. —DORIS DUMLAO-ABADILLA