Property firm sells P10B receivables

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    8990 Holdings Inc. said it is selling P10 billion worth of receivables to Fillmore Resources and Holdings Inc.

    “This brings the company’s total receivables sold to P25 billion since it began accelerating the sale of receivables to underline its aim to fund its aggressive growth plans through internally generated cash and lower its reliance on debt,” the company said in a statement.

    The company earlier said it will spend P4 billion on various projects nationwide this year, with plans to double capital expenditure next year as it looks to post P20 billion in revenues by next year. The company is confident of hitting its target as it expects to recognize sales from its Urban Deca Homes Ortigas project starting next year.

    After two months from the launch, Urban Deca Homes reported sales reservations worth P1.5 billion.

    8990’s receivables portfolio as of end-September stood at P20.9 billion.

    This is expected to decline further following the sale of the P5 billion contracts to sell (CTS) receivables and upon the completion of the company’s P2.5 billion securitization deal by the end of the year.

    Once launched, 8990’s securitization deal will open the doors to sustainable housing finance which will allow developers to focus on the business of building homes. The company’s securitization initiative was spearheaded by the late 8990 president and chief executive officer Willie J. Uy.

    “This will be the first private sector led securitization deal in the Philippines,” 8990 said.

    The company said the securitization will allow 8990 to access funding through the conversion of cash flows from its CTS receivables into asset backed securities that would provide investors high yields. The P2.5 billion securitization is set to be rolled out during the first quarter of 2020.

    The company received the approval of the Housing Guarantee Corp. making this issuance risk-free. 8990 is waiting for the rating of the securitization.