8990 sells P3B receivables to BDO

MASS housing developer 8990 Holdings Inc. has signed a deal to sell P3 billion worth of housing receivables to Sy family-led Banco de Oro Unibank, unlocking liquidity that can be reinvested to build and sell more houses.

This brings to P11 billion the total deals sealed by 8990 Holdings to pare down its in-house contract-to-sell portfolio, meeting the target for 2016, the housing developer disclosed to the Philippine Stock Exchange on Monday.

8990 Holdings earlier sold P1 billion worth of receivables to BPI Family Bank and P2 billion to Security Bank. The housing firm also earlier mandated the investment banking arm of China Bank to underwrite the offering of up to P5 billion worth of securities backed by housing receivables.

Under the securitization deal, 8990 Holdings’ subsidiaries will sell up to P5 billion worth of CTS to a special purpose company of China Bank Capital, which will then issue three tranches of 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 purchase of receivables by big banking institutions is seen to indicate the growing satisfaction and confidence of banks with regards to the quality of 8990 Holdings’ buyers, its credit evaluation procedures and its credit and collection platform.