8990 inks deal to sell P10B in receivables
Mass housing developer 8990 Holdings Inc. has signed an agreement to sell another P10 billion worth of housing receivables and is working on a landmark P2.5-billion securitization deal by the first quarter of next year.
The P10 billion worth of contract-to-sell (CTS) receivables were sold to a company called Fillmore Resources and Holdings Inc. in a deal financed by Philippine National Bank. This brought to P25 billion the total receivables unloaded by 8990 Holdings since it began accelerating the sale of receivables to support an aggressive growth plan while reducing its borrowing requirement.
Earlier this month, 8990 Holdings sold P5 billion worth of housing receivables to local financial holding firm Dearborn Resources and Holdings Inc. in a deal funded by China Banking Corp.
8990 Holdings typically encourages buyers to get long-term financing from Pag-Ibig and other banks. However, some buyers opt for CTS financing to expedite the purchase. As the housing developer’s primary business is to build and sell houses and not to finance consumers’ purchase of houses, the strategy is to sell some of the receivables to other financing institutions and use proceeds for expansion.
The company’s portfolio of housing receivables stood at P20.9 billion as of end-September, which is seen to decline with recent transactions and upon the completion of a P2.5-billion securitization deal that was initiated by the company’s late president, Willie Uy.
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