BDO buys P3 B worth of 8990 receivables

MANILA, Philippines - Listed mass housing developer 8990 Holdings Inc. has signed an agreement with Sy-owned Banco de Oro Universal Bank for the purchase of P3 billion worth of contract-to-sell receivables.

In a disclosure to the Philippine Stock Exchange (PSE), 8990 said the purchase value of the receivables was based on outstanding principal balance and that the receivables must be seasoned for at least 12 months, with no past due experience.

CTS is 8990’s in-house financing program for potential homebuyers.

8990 president and CEO Januario Jesus Atencio said BDO’s investment increases the lender’s CTS purchase arrangements to P11 billion, first with BPI Family for P1 billion, Security Bank (P2 billion) and Chinabank.

 “For 8990, the purchase of our receivables indicates the growing satisfaction and confidence of banks with regard to the quality of our buyers, our credit evaluation procedures, and our credit and collection platform,” Atencio said.

The CTS portfolio of 8990 jumped 35 percent in terms of value to nearly P19 billion last year and by 30 percent in terms of units to 20,330 from 15,597.

Likewise, interest income from CTS grew 34 percent to P1.2 billion.

8990 has been strengthening its business and has lined up several projects for the year. It seeks to expand its footprint through various housing projects this year as it continues to sell its CTS receivables to the different institutions.

For 2016, the company will build 12,453 housing units, where 46 percent would come from Luzon, 30 percent from the Visayas and 24 percent from Mindanao.

Atencio said there is a 4.5 million housing backlog that is growing at five percent.