By JAMES A. LOYOLA
The National Home Mortgage Finance Corporation (NHMFC), prime mover in the housing finance industry, has raised ₱270.25 million with the closing of its “BALAI Bonds 1” securitization transaction for a portion of its Residential Loan portfolio.
The transaction consisted of one tranche of Senior Notes and one tranche of Subordinated Notes.
The Class A Senior Notes are worth ₱175.0 million and shall be amortized using the Controlled Amortization method with a pre-defined amortization schedule during the Controlled Amortization Period.
The Class B Subordinated Notes are worth ₱95.251 million, and will be amortized after all Senior Notes have been settled, with variable interest payable quarterly.
Philippine Rating Services Corporation (PhilRatings) affirmed the Conditional Credit Ratings of PRS A plus for the Class A Senior Notes, and PRS Ba plus for the Class B Subordinated Notes into Final Ratings.
The Conditional Ratings were affirmed into Final Ratings upon closure of the BALAI Bonds 1 transaction and the submission of final and signed transaction documents and other requirements.
PhilRatings determined that all pertinent conditions for the Conditional Ratings have already been fulfilled.
Obligations rated PRS A have favorable investment attributes and are considered as upper-medium grade obligations.
Although obligations rated PRS A are somewhat susceptible to the adverse effects of changes in economic conditions, the obligor’s capacity to meet its financial commitments of the obligation is still strong.
Obligations rated PRS Ba, on the other hand, are less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties relating to business, financial, or economic conditions, which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation.
The Final Credit Ratings and Outlook took into consideration the Asset Pool collection performance, economic outlook, senior and subordinated notes structure, prepayment and interest rate risks, and transaction participants.
This is already the third securitization transaction entered into by the state-owned NHMFC for its total Residential Loan portfolio.
“As such, it may be expected that since the best performing assets of the portfolio have already been securitized previously, the next-best performing assets back this latest securitization,” noted PhilRatings.