NHMFC notes obtain PRS Aa rating

MANILA, Philippines - National Home Mortgage Finance Corp.’s (NHMFC) second series of Residential Mortgage-backed securities (RMBS) obtained a final credit rating of PRS Aa for both P300 million Class A senior notes and P120 million Class B senior notes.

A final credit rating of PRS Baa was likewise assigned to the P183.7-million Class C subordinated notes.

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

The aggregate principal amount of the securitization issue amounted to P603.7 million.

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.

Obligations rated ‘PRS Baa’, on the other hand, exhibit adequate protection parameters. Adverse economic conditions and changing circumstances, however, are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

In issuing the ratings, PhilRatings took into account the following factors: loans in the asset pool are highly seasoned and are considered as low-delinquent accounts; strong credit enhancement and standby liquidity facilities; moderated concerns on asset pool performance given the material amount of restructured loans included in the portfolio; and the relatively positive economic outlook for the Philippines.

The NHMFC was organized in 1977 primarily to develop a secondary market for home mortgages and provide financing for various low-cost housing projects.