The Securities and Exchange Commission said Thursday it approved the P2.13-billion securitization program of mass housing developer 8990 Holdings Inc.
It said the securitization of P2.13 billion worth of contract-to-sell would be subject to the fulfillment of certain conditions. This will be the country’s first private sector-led residential mortgages securitization deal, paving the way for other reals estate firms to tap this financing scheme.
Under the securitization plan, 8990 Holdings and subsidiaries 8990 Housing Development Corp., 8990 Luzon Housing Development Corp., 8990 Davao Housing Development Corp. and Fog Horn Inc. will sell to CBC Assets One Inc. receivables from about 2,511 CTS accounts with an original term of up to 25 years.
Following the sale, CBC Assets One will issue certificates worth about P2.13 billion backed by the CTS receivables.
The issuance will consist of Tranche A certificates worth about P1.59 billion and Tranche B certificates worth P531.3 million to be sold at face value.
The certificates are exempt from registration, as they will be issued to not more than 19 investors in the Philippines.
The company said the securitization deal would open the doors to sustainable housing finance which would allow developers to focus on the business of building homes.
Aside from securitization, 8990 Holdings also plans to issue preferred shares.
The company earlier reported that its board of directors approved the issuance of 30 million preferred shares with an oversubscription option for another 20 million shares. The preferred shares are cumulative, non-voting, redeemable and non-convertible.
It appointed China Bank Capital Corp. as the sole issue manager and lead underwriter for the fund raising activity.
The final terms and conditions of the Series B preferred shares, including the final offer size and dividend rate will be finalized after the bookbuild exercise.
