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China Bank Capital to underwrite 8990 Holdings’ securitization deal

MANILA, Philippines – Listed mass housing developer 8990 Holdings Inc. has mandated China Bank Capital Corp. to arrange and underwrite the securitization of up to P5 billion of contract to sell receivables of 8990’s property development subsidiaries.

The arrangement marks a new opportunity for housing sector financing, its president and chief executive officer Januario Jesus Atencio said.

China Bank Capital is the investment banking subsidiary of China Banking Corp., one of the largest domestic universal banks.

8990 chairman Mariano Martinez signed the mandate with China Bank Capital Corp. President Romy Uyan Jr. and director Manolo San Diego, for the first purely private sector and largest housing securitization deal in the country.

“This is a trailblazing moment for 8990 as well as the mass housing sector. It opens up a whole new horizon for housing finance in the country,” Atencio said.

The arrangement with China Bank follows a similar deal 8990 earlier signed with Security Bank Corp. and Bank of the Philippine Islands.

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Under the proposed P5 billion securitization arrangement with China Bank, 8990’s subsidiaries will sell the specified amount of contract to sell receivables to a special purpose company (SPC) of China Bank Capital, which will then issue three tranches of asset-backed securities (ABS) to investors.

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

The proposed transaction will be undertaken pursuant to securitization plan which has been submitted to regulators for approval.                              

 

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