SEC okays NHMFC's P2-billion notes issues

Updated May 30, 2009 12:00 AM [ philstar.com ]

MANILA, Philippines – The Securities and Exchange Commission (SEC) has approved the National Home Mortgage Finance Corp.’s issuance of P2.06 billion worth of notes.

NHMFC was recently issued a PRS Aa rating for its proposed maiden issuance of around P1.862-billion residential mortgage-backed securities (RMBS).

RMBS are issued based on the cash flows from residential home loans. These can serve as a funding source for the residential mortgage market.

Domestic credit rating agency PhilRatings said obligations rated PRS Aa are of high quality and are subject to very low credit risk. “The obligor’s capacity to meet its financial commitment on the obligation is very strong,” it said.

In assigning the rating, PhilRatings took into account the relatively small and affordable loan monthly amortization amounts.

PhilRatings said the loans for inclusion in the asset pool are highly seasoned with low loan to value ratio and low default rates. Loans for inclusion in the asset pool have passed selection criteria for credit quality and are considered prime accounts of NHMFC.

The excess spread and subordinated notes from the proposed structure are more than adequate to cover losses from an asset pool with a historically low default rate, PhilRatings added.

PhilRatings, however, noted that the current global credit crisis is expected to have negative repercussions on the local economy and employment conditions. Job security and payment capacity of borrowers included in the pool may then be adversely affected over the life of the issue.

The Philippine National Bank Trust Banking Group was appointed lead underwriter for the proposed structure while Standard Chartered Bank will serve as the lead arranger.

The issuance of the notes would be the first public residential mortgage-backed transaction in the country and the second major securitization offering under the recent law.

“A successful securitization by a government financial institution such as NHMFC provides diversity and added liquidity to debt capital markets and would provide a significant boost to the Philippine securitization market. By offering a new asset class to investors, NHMFC would be expanding the investment choices to investors that need access to long-dated and high quality holdings,” said Joseph Peter S. Sison, president of NHMFC.

“This securitization would be a major step towards the establishment of the secondary mortgage and housing-related asset-backed securities market. This would provide a much-needed liquidity mechanism to primary mortgage lenders as well as an additional investment opportunity for investors that need to diversify their holdings,” Sison added. – Zinnia dela Peña

_____________________________________________________________________________________

Vista Land puts up new marketing firm

Saturday, May 31, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]

BY DON GIL. K. CARREON, Reporter

Subsidiaries of property holding firm Vista Land & Lifescapes, Inc. have set up a new company to handle the group’s sales and marketing efforts for "vertical" developments.

In a telephone interview on Friday, Vista Land Chief Information Officer Ricardo B. Tan, Jr. said the company, named Vista Towers, Inc., was set up to boost the promotion of vertical projects.

"It makes sense strategically... These are condo developments and there is a difference [in promoting these] compared to horizontal projects," he said.

Vista Towers’s authorized capital is only P1 million, bought by Vista Land units Crown Asia Properties, Inc., Brittany Corp., Camella Homes, Polar Mines Realty Ventures, Inc., and several company executives, documents from the Securities and Exchange Commission showed.

In 2007, the property group established by Senator Manuel B. Villar, Jr. started its first condominium developments, expanding its portfolio from houses and lots.

Vertical projects include the 30-floor Mosaic condominium in the Makati business district, the three-tower Laureano di Trevi condominium on Pasong Tamo, and the 42-storey Avant at Bonifacio Global City in Taguig. It also has mid-rise developments in Bonifacio Global City, Makati and Muntinlupa.

Mr. Tan said Vista Land’s condominium projects would still be built under the company’s brands, but the marketing and sales efforts would be transferred to Vista Towers.

"We have some good brands, but anything vertical would be handled by Vista towers," he said.

The Vista Land executive, however, said the company’s strategy has not changed. "If the market gets better in vertical we may launch more projects. But we are not shifting strategies ... We are a housing developer and will always be a housing developer," he said.

Vista Land’s profits declined by almost a fifth to P630 million in the first quarter, while revenues declined by 6% to P2.45 billion.

Shares in Vista Land closed P0.02 higher to P1.74 apiece on Friday.

_____________________________________________________________________________________

SM group to hold road show for bond sale

Saturday, May 31, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]

Sy-led SM Investments Corp. will hold a road show next week for a forthcoming sale of P5 billion in fixed-rate bonds after securing the nod of the Securities and Exchange Commission.

In a statement on Friday, the holding company of mall magnate Henry Sy, Sr. said the domestic roadshow would be from June 1 to 3 in Manila, Davao and Cebu. Buyers need to pay a minimum of P20,000 per transaction. The bonds will be issued in two tranches, maturing in five and seven years. SM Investments has the option to increase the P5 billion bond offer by P5 billion more in case of strong demand.

The bonds are backed by a Triple-A credit rating by Philippine Rating Services Corp., the highest rating, which means they have minimal credit risk.

It would be the first time for SM Investments to sell the bonds to the public, having opted to borrow from large financial institutions before.

The firm earlier said it expects net proceeds of the sale, to be underwritten by Sy-owned BDO Capital & Investment Corp., to reach P9.89 billion.

SM Investments had said it would use the money to build new malls, develop the SM Mall of Asia Complex in Pasay as well as the high-end resort Hamilo Coast in Batangas, and finance residential projects.

Capital spending would reach P25.8 billion this year, P13.3 billion of which would be allotted for real estate and tourism projects.

SM Investments was among three groups that qualified to participate in the project of state-run Philippine Amusement and Gaming Corp. to develop 85 hectares of reclaimed land from the Manila Bay into a gaming and leisure complex.

Shares in SM Investments closed 14% higher to P335 apiece on Friday. — Kristine Jane R. Liu

____________________________________________________________________________________

Senate ratifies new rent control law

Saturday, May 31, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]

The Senate on Wednesday night ratified a new rent control law aimed at protecting housing tenants from unreasonable rent increases.

Senate Bill (SB) 3163 or the proposed "Rent Control Act of 2009" sets a cap on annual rent hikes.

Republic Act (RA) 9341 or the Rent Control Act of 2005, which had set a 10% annual limit to such increase, expired last Dec. 30.

Senate Majority Leader Juan Miguel F. Zubiri said President Gloria Macapagal-Arroyo would likely sign the new law after Congress goes on a break on June 6.

Congress is going to end its second regular session on June 5. The third regular session will open on July 27.

SB 3163 seeks to limit rent increases by not more than 10% annually, while the House version, House Bill (HB) 6098 which was ratified Tuesday night, puts the limit up to 4%.

Under the reconciled version of the two bills, the annual cap on rent increases was set at 7% for units being rented out for not more than P10,000 per month in Metro Manila and other highly urbanized cities and not more than P5,000 in other parts of the country. A one-year moratorium on rent increases upon effectivity of the proposed act was also provided.

The law will be effective until Dec. 31, 2013. After such period, the Housing and Urban Development Coordinating Council (HUDCC) will be authorized to study if the industry needs to be regulated or deregulated by the time the five-year mechanism lapses, taking into consideration latest statistics on number of rental units, prevailing rental rates, monthly inflation rate on rentals and prevailing rental rates.

Also, the HUDCC is mandated to conduct every three years from the law’s effectivity a review of its implementation and a study on rental regulation, and submit to Congress its recommendation on whether a continuing regulation is still necessary or deregulation is already warranted. — Jhoanna Frances S. Valdez

____________________________________________________________________________________