Lehman to pursue $1-B RP plan

Lehman Brothers will push through with its plan to invest at least $1 billion on asset management in the Philippines, after its path was cleared by the passage of the Special Purpose Vehicle Act (SPVA) that allows banks to sell their bad loans to asset managers.

Finance officials said yesterday that Lehman is only waiting for the government to release the implementing rules and regulations (IRR) even as it launched an active search for banks willing to part with their bad loans at discounted prices.

Finance Secretary Jose Isidro Camacho told reporters that Lehman sent representatives to Manila right after the bill was enacted into law and was actively inquiring about possible investments in the banking industry.

"They have the most definite plan that I know of," Camacho said. "I believe that they are already talking to some people and they sent representatives to talk to me. They can’t get any more serious than that."

Camacho said Lehman made no mention of any specific bank that it was negotiating with.

After losing its Metrobank deal to Rabo Bank of the Netherlands, Lehman Brothers last year began eyeing the non-performing loans (NPLs) of Land Bank of the Philippines (Landbank).

Lehman was attracted by Landbank’s NPLs although nothing has been finalized by either side. Camacho said Lehman was eyeing several banks but Landbank was the most prominent among these.

The US-based investment bank had originally intended to put up a joint asset management company with Metropolitan Bank and Trust Co. (Metrobank), a transaction that would have allowed Metrobank to get rid of some P31-billion worth of bad loans.

Lehman’s plan was to spend about $1 billion buying bad loans from banks as well as housing mortgages of the government and other problematic assets that could still be turned around.

Lehman was also planning to invest in other projects such as the planned securitization of the government’s receivables from the Malampaya natural gas project.

Metrobank, however, ended up selling over P16-billion worth of its non-performing loans (NPLs) to Asia Recovery Corp., an asset management company (AMC) set up on the basis of investments by a foreign group led by Rabobank, the third largest bank in the Netherlands.