P595-M Bahay bonds maintain high rating | mb.com.ph | Philippine News
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P595-M Bahay bonds maintain high rating

Philippine Rating Services Corporation (PhilRatings) has maintained the issue credit rating of PRS Aa for the remaining P595-million Class A Senior Notes of National Home Mortgage and Finance Corporation’s (NHMFC) Bahay Bonds 1 Securitization Transaction (BB1).

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.

PhilRatings also assigned a Rating Outlook of Stable to the credit rating of the Class A Senior Notes. A Stable Outlook means the rating is likely to be maintained or to remain unchanged in the next twelve months.

The ratings firm also adjusted the issue credit rating for the P310.898 million Class B Subordinated Notes (as of collection period ended June 2015) from PRS Baa to PRS Baa minus with a Negative Outlook.

Obligations rated “PRS Baa” 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.

PRS Baa-rated issues may possess certain speculative characteristics. A Negative Outlook means there is potential for the present credit rating to be downgraded in the next twelve months.

The Class B Subordinated Notes provide a degree of protection for the Class A Senior Notes as the Class B Subordinated Notes will absorb initial losses that may be brought about by mortgage accounts which are included in the asset pool and which may go into default given prevailing circumstances.

The change in rating considers the trend in the pool’s performance over the past years that the transaction has been monitored.

In coming up with the ratings, Philratigns considered that cash balances continue to remain adequate relative to principal payments for the Senior Notes; timely remittances of interest payments to Senior Notes were maintained; the declining balance of outstanding Senior Notes relative to Junior Notes provides greater protection to the Senior Notes; and economic conditions continue to be supportive of the payment capacity of borrowers.