Mass housing developer 8990 Holdings Inc. agreed to sell P10 billion worth of receivables to Fillmore Resources Holdings Inc.
8990 Holdings said in a disclosure to the stock exchange the transaction would be financed by Philippine National Bank, the fifth-biggest lender in terms of assets.
The latest brings the company’s total receivables sold to P25 billion in a bid to fund its aggressive growth plans through internally generated cash and lower reliance on debt.
The receivable of 8990 Holdings as of end September this year 2019 stood at P20.9 billion.
The level is expected to decline further following the sale of P10 billion worth of contract-to-sell receivables and upon the completion of the company’s P2.5-billion securitization deal scheduled early next year.
The property firm said the securitization is set to be rolled out during the first quarter of 2020. It will mark the beginning of a series of securitization deals that will help the company become less reliant on debt.
8900 Holdings acting president and chief executive Alexander Ace Sotto said the company already received the approval of Home Guaranty Corp., making the issuance risk free.
Sotto said the company was just waiting for a rating agency to assign an investment grade to the underlying securities after it conducted an extensive appraisal of the pool of collaterals and stress tests on the assets. The rating will make investors be more informed once they are sold to the retail market.
“We are confident that we will receive a favorable rating from the rating agency, 8990 has an extensive loan underwriting process that makes sure its buyer risk profile is acceptable to investors,” Sotto said.
8990 Holdings in 2020 plans to spend roughly P8 billion in capital expenditures, which is double the P4-billion programmed spending for 2020.
The increased capital spending will help the company meet its goal of hitting P20 billion in revenues in 2020 as well as funding its largest project, Urban Deca Homes Ortigas.
Launched in July 2019, Urban Deca Homes Ortigas will offer 19,046 units. The company reported sales reservations equivalent to P1.5 Billion after two months of the launch.