P604M targeted from Bahay Bonds

STATE-RUN National Home Mortgage Finance Corp. (NHMFC) targets to raise P604 million from the issuance of residential mortgage-backed securities dubbed as “Bahay Bonds 2.”

“We target to raise around P604 million from the Bahay Bonds 2,” said NHMFC Vice President for Securitization Daisy S. Dulay in a phone interview yesterday.

“Proceeds of the Bahay Bonds 2, unlike those of the Bahay Bonds 1, which were used to pay the debts of the state housing agency to the SSS (Social Security System) and Pag-IBIG Fund, will be used by NHMFC to purchase new housing loan receivables,” she said.

NHMFC was created under Presidential Decree No. 1267 to develop and provide a secondary market for home mortgages granted by public and/or private home financing institutions. It raised P1.75 billion from Bahay Bonds 1.

“By using securitization or the conversion of home loan receivables into securities, we can immediately recycle the funds and buy new housing loan receivables and thus, turn around money faster,” Ms. Dulay explained.

The bonds will [be] offered from July 27 to August 7 to both retail and institutional investors.

The issue date is Aug. 17. The debt papers will be listed on the fixed-income bourse that same day.

The debt notes to be offered are classified into three, namely, Class A senior notes, Class B senior notes and Class C subordinated notes.

NHMFC will issue P300 million worth of Class A senior notes. With life of five years, they will be sold to retail investors and will carry a 4.8% interest rate.

Class B senior notes, with issue size of P120 million, have a life of 10 years, will carry a 6% coupon rate and will be available to institutional investors.

“The Class C subordinated notes worth P180 million will be kept by NHMFC,” Ms. Dulay said.

Interest rates of the papers, she said, were pegged on the yields of five-and 10-year securities at the secondary market.

At the secondary market yesterday, the five-year papers fetched 4.5494%, while the 10-year papers got 4.96%.

Bahay Bonds 2 have been rated Aa by PhilRatings. Interest income is tax free and will be paid every quarter.

Land Bank of the Philippines has been mandated as underwriter of the issuance. Landbank along with Philippine Commercial Capital, Inc. will also serve as selling agents. 

 

For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.