FOR AS low as P5,000, Filipinos may now invest in BahayBonds, said Vice President and Housing and Urban Development Coordinating Council chairman Jejomar C. Binay.
The housing czar urged Filipinos to avail of the BahayBonds Series 2 (BB2) as a safe and profitable investment alternative.
“This is a great way to induce Filipinos to start saving, especially in light of the recent Bangko Sentral survey that most heads of Filipino households do not save,” the Vice President declared.
The invitation to retail investors followed the announced issuance of P600 million worth of BB2 classified as Residential Mortgage Backed Securities mid-August of this year by the state-run National Home Mortgage Finance Corporation (NHMFC).
According to Binay, who also sits as Chairman of the NHMFC Board of Directors, the BahayBonds2 shall be the first-ever Retail Housing Asset-Backed Securities in the Philippine market. It shall be backed up by an asset pool composed of high quality accounts from the Corporation’s prime assets.
The BB2 targets retail investors and are designed to be a safe, high yielding and affordable savings instrument.
“With a 4.80% interest rate, the bonds are higher than most interest rates on bank deposits. Coupled with a tax-free guaranteed return, this first retail mortgage bond would be the most attractive investment for individual investors who want to maximize their profits,” Binay said.
“This is a good venture for overseas Filipinos, government employees, or every common Juan who do not save because they are not enticed by the interest rates offered by traditional institutions like banks,” he added.
The BB2 offers the privilege of free ATM-accessible savings accounts and the convenience of balance inquiry through internet and phone banking facilities both with Land Bank of the Philippines (LBP).
Moreover, its current market value is readily available due to Philippine Dealing Exchange listing and instant loan facility against latest market value.
“As a bonus, house and lot units will be raffled for active accounts,” Binay said.
The Bangko Sentral ng Pilipinas considered BB2 as risk free because the securitized loans guaranteed by the Home Guaranty Corporation carry the sovereign guaranty of the Republic of the Philippines.
The transaction is classified into three tranches. Majority of the issues classified as Class A Senior Notes shall be sold to retail investors, Class B Senior Notes shall be sold to qualified institutional investors while Class C Subordinated Notes shall be kept by NHMFC.
Binay said that this structure provides greater assurance of safety and payment to the retail investors.
The public offering of the bonds was opened on July 26, 2012. Retail investors can subscribe to BB2 through any branch of the LBP, which serves as the selling agent.
Also, in a related statement, the Philippine Rating Services Corporation (Philratings) announced that BahayBonds2 Securitization Issue will be getting a conditional credit rating of PRS Aa for both the P300.0 million Class A Senior Notes and the P120.0 million Class B Senior Notes. A conditional credit rating of PRS Baa, on the other hand, was given to the P180 million Class C Subordinated Notes.
Obligations rated PRS Aa are of high quality and are subject to very low credit risk while obligations rated PRS Baa exhibit adequate protection parameters.