[ Malaya.com.ph ] June 18, 2010
The Housing and Land Use Regulatory Board (HLURB) has given a boost to the planned P5.5 billion bond float of Home Guaranty Corp. (HGC) by making the bonds eligible for compliance to the law requiring real estate firms to set aside units for low-cost housing.
HLURB board resolution 857 was signed by outgoing Vice-President Noli de Castro, chair of the Housing and Urban Development Coordinating Council which oversees HLURB.
RA 7279 or the Urban Development and Housing Act of 1992 requires housing and land developers to set aside 20 percent of their portfolio to low-cost and socialized housing.
HGC expects to sell a big chunk of its planned bond issue to institutional investors and real estate companies.
HGC is tapping the local bond market to pay-off maturing obligations.
The home insurer, however, will not be able to meet its revised second quarter target for the bond offering due to lack of time.
Another factor complicating the bond issuance is that state housing agencies, including HGC, face a revamp under the administration of President Benigno Aquino III.
HGC has been eyeing to sell bonds since last year.
The agency will allocate P2.5 billion of the proceeds to debt refinancing while the P3 billion will go to unpaid guarantees with the Social Security System.
HGC’s total obligations currently stand at P5.5 billion to P6 billion.
The HGC last sold seven-year bonds in 2006 worth P12 billion. - Dennis Gadil