SEC approves compliance Asset-Backed Securities: Now ready for housing developers

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Department of Human Settlements and Urban Development Secretary Jose Rizalino “Jerry” Acuzar announced that the compliance Asset-Backed Securities (ABS) of the National Home Mortgage Finance Corporation (NHMFC) has been recently approved by the Securities and Exchange Commission (SEC).  This is the latest securitization offering of the NHMFC and is now available for offering to housing developers.

Secretary Acuzar said that with the compliance ABS, developers can enjoy a convenient, risk free manner of compliance to the Balanced Housing Development Program (BHDP) – a program for developers to contribute to Socialized Housing Projects as mandated by Urban Development and Housing Act of 1992 (Republic Act No. 7279, as amended by R.A. No. 10884).

“Investment in this Asset-Backed Securities entails full compliance to the Balanced Housing Development Program. This is in contrast to other modes of available compliance such as the Incentivized Compliance Program that only merits provisional compliance to the BHDP, subject to the completion of the development project,” Secretary Acuzar said. He further added that investment in the compliance ABS will be a great opportunity for developers in the private sector to contribute and participate in the Pambansang Pabahay Para sa Pilipino Program, as funds generated by the compliance ABS will be directly used for the development of New Socialized Housing Projects.

“In the NHMFC’s compliance ABS, developers are ensured that their regulatory requirements under the law are complied with from the onset of their projects while at the same time contributing to the intensified efforts to give housing to more Filipino families,” he stressed.

NHMFC launched the compliance ABS offering in a virtual roadshow on Tuesday, December 5, 2022 hosted by Landbank of the Philippines (LBP), the arranger for the issuance. A total of Five Hundred Seventy Million Pesos (P570M) worth of securities will be issued to at most nineteen (19) qualified investors/real estate developers. Institutional book building and roadshows for the compliance ABS are presently being conducted and the issuance is scheduled on December 15, 2022. 

The Housing Secretary said that this is DHSUD’s way, through NHMFC, of attracting private capital to the housing industry. NHMFC President Renato L. Tobias sees the compliance ABS as NHMFC’s contribution to the Pambansang Pabahay Para sa Pilipino Program of the government. In the said program, the government aims to provide 1 million homes a year until 2028. “As a Key Shelter Agency under the leadership of Secretary Acuzar, NHMFC fully commits to contribute in making the Pambansang Pabahay Para sa Pilipino Program a reality through its function as the country’s premiere secondary mortgage institution,”  President Tobias said.