The Market Monitor Minding the Nation's Business
Mass-housing developer 8990 Holdings Inc. partnered with listed Security Bank Corp. for the take out of its receivables amounting to P2 billion next month.
8990 Holdings President and CEO Januario Jesus Atencio III said the company signed a memorandum of agreement (MOA) with Security Bank for the purchase of its in-house contract to sell (CTS) receivables worth P2 billion on a non-recourse basis.
The agreement between 8990 Holdings subsidiaries, composed of 8990 HDC, 8990 Luzon, 8990 Davao and Fog Horn, and Security Bank was signed on Mar. 16.
“We expect that the actual sale to take place in April after the Security Bank’s due diligence,” Atencio said, “with the purchase value based on the outstanding principal balance.”
He added that the receivables must be seasoned for at least 12 months and no past due experience in the past 12 months.
8990 Holdings will likewise act as collecting agent for Security Bank and will be paid a collection service fee based on the collected amount.
“The agreement with Security Bank signifies a serious interest for banks to partner with 8990 and establish for the mass-housing sector a viable alternative for housing finance in the Philippines,” Atencio said.
He revealed the listed developer would pursue similar arrangements with other banks and financial institutions.Last October, 8990 Holdings signed an agreement with BPI Family Savings Bank for the purchase of its in-house CTS receivables worth P1 billion.
“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 Holdings jumped 35 percent in terms of value to P18.99 billion last year from P14.11 billion in 2014 and by 30 percent in terms of units to 20,330 from 15,597.
Likewise, interest income from CTS went up by 34 percent to P1.2 billion last year from 901 million in 2014.