National Home Mortgage launches Bahay Bonds 2

CEBU, Philippines - Targeting the low and middle income market segments, the National Home Mortgage Finance Corporation (NHMFC) urged Cebuano investors to venture in its first retail housing loan in the country – the Bahay Bonds 2.

The latest project is a five-year residential mortgage backed securitization of low-cost and socialized housing loans that is intended to raise P300 – 600 million.

This was after the successful launch of the P2.06-billion Bahay Bonds 1 on March 23, 2009 which is considered as the first rendered mortgage backed securities issued in the Philippines by a government agency.

Bahay Bonds are securities issued by the Special Purpose Trust that is composed of current and performing loans from NHMFC’s low delinquency residential loan portfolio to purchase additional housing receivables form public and institutional lenders.

“After the big investors were able to avail of the Bahay Bonds 1, it’s time for the market of small investors to take advantage of the very attractive returns of these bonds,” NHMFC President Felixberto Bustos said during the General Investors’ Briefing last july 27 at Crown Regency Hotel and Towers.

He added that the asset pool as of March 31, 2012 cut-off date included 3 365 residential housing loans with an outstanding value of P603.9 million, monthly installments for as low as P5 000 and in increments of P5000 thereafter, weighted average selling time of 9.39 years and weighted average of remaining term of 9.14 years.

He further noted that they began selling the bonds last July 26 and will end on August 7 which will be then issued by the Land Bank of the Philippines (LBP) on August 17, 2012.

With a quarterly interest payment at 4.80%, he said that investors will be repaid at the end of five years on its maturity date of August 17, 2017.

“NHMFC and LBP have made sure the first source of protection for Bahay Bonds 2 is a really good asset pool. It is rated Aa by the Philippine Rating Securities Corporation and is less risky since it is guaranteed by the Home Guaranty Corp.,” he stated. — Grace Melanie I. Lacamiento

Although he admitted that there are risk factors that may be involved such as limited resource transaction, dependence on services and market value of bonds may charge, Bustos cited that benefits outnumber such risks since Bahay Bonds 2 features high quality assets, strong credit and liquidity supports, affordability, tax-free and marketability.

LBP Vice President Ruel Romarate, on the other hand, said that the second issuance of Bahay Bonds by NHMFC paved the way for enhancing liquidity in the capital market while providing Filipinos alternative of investments and increasing their savings and income through affordable instruments.

The LBP serves as the selling agent of bonds for the primary market while these bonds will be also listed with the Philippine Dealing and Exchange Corporation, thus making it tradable in the secondary market.

To purchase the Bahay Bonds, investors need to open a peso deposit account or designate an existing peso account and fill out the required forms such as Application to Purchase and Client Information Sheet at any Land Bank servicing branch.

Investors will receive a validated Application to Purchase upon payment of Bahay Bonds and a Registry Confirmation issued by the Registry via e-mail or at the LBP branch.

All current individual investors are also entitled to join 3 raffle draws over the 5-year period to be held on December 2012, December 2015 and August 2017 in which one winner per draw shall receive a house and lot package with approximate value of P400 000 in Dasmariñas Cavite. (FREEMAN)