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NHMFC issuance of securities reset to February next year

Vol. XXII, No. 105 [ BusinessWorld Online ]

Friday, December 19, 2008 | MANILA, PHILIPPINES

STATE-RUN National Home Mortgage Finance Corp. (NHMFC) has postponed anew its maiden offer of mortgage-backed securities.

The plan was to issue the securities in June but this was postponed to July or August, after the NHMFC said it would still study if there was a market for the papers.

Joseph Peter S. Sison, NHMFC president, told BusinessWorld the issuance of P2.6 billion worth of securities — up from the original plan of P2.5 billion — has been reset to February next year.

The financial turmoil in the US has prompted the state agency to reset the offering as investors have become cautious.

"We are moving to February upon advice of our financial advisor and underwriter after a survey of possible investors was conducted," he said.

"They requested four to six weeks to conduct due diligence before going back to their respective boards."

Possible investors surveyed included three major banks and insurance companies in the Philippines.

Standard Chartered Bank (StanChart) is the issuance’s underwriter while Ernst and Young Transaction Advisory Services, Inc. is the financial advisor for the securitization.

NHMFC aims to enhance its ability to generate funds and liquidity for housing finance from the capital market through securitization, or the creation of a financial instrument by combining other financial assets and then marketing these to investors.

NHMFC’s low delinquency accounts will be securitized in this instance.

"The lessons from the US have not made us adventurous in coming up with financial instruments. Because it is our maiden issue, we learn from their mistakes," he said.

"What we did was to categorize our accounts. We have segregated low delinquent accounts. These are the super prime accounts where cash flow is steady and secure," he added. — Ruby Anne M. Rubio


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