8990 Holdings, China Bank sign P5B securitization deal

April 22, 2016 8:25 pm

MASS housing developer 8990 Holdings Inc. has tapped China Bank Capital Corp., the investment banking arm of China Bank Corp., to underwrite the offering of up to P5 billion worth of securities collateralized by housing receivables of its property development subsidiaries.

In a disclosure to the Philippine Stock Exchange on Friday, 8990 said that China Bank Capital will arrange and underwrite the securitization of the contracts to sell (CTS).

Under the proposed securitization, 8990’s subsidiaries will sell the CTS receivables to a special purpose company (SPC) of China Bank Capital, which will then issue three tranches of asset-backed securities (ABS) to investors.

SPC will use the cash flow from the receivables to make principal and interest payments to the ABS investors until each tranche is completely paid in order of seniority.

8990 said the proposed securitization is the first “purely private sector and largest housing securitization deal in the country” and that it is expected to be the “largest securitization” under the Securitization Act of 2004.

8990 chief executive officer Januario Jesus Atencio described the deal as a “trailblazing moment.”

“This is a trailblazing moment for 8990 as well as the mass housing sector,” Atencio said.

“The P5 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.”

The agreement was signed by 8990 chairman Mariano Martinez and China Bank Capital Corp. president Romy Uyan Jr. and director Manolo San Diego.

China Banking Corporation is one of the largest domestic universal banks.

Last March, 8990 also inked a deal to sell P2 billion worth of in-house CTS receivables with Security Bank Corp.

In October 2015, 8990 signed an agreement with BPI Family Savings Bank for the purchase of its CTS receivables worth P1 billion.

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