IFC approves $40-M loan to SPV

The World Bank’s investment arm, the International Finance Corp. (IFC), yesterday said it has extended a P1.79 billion ($39.7 million) loan to a special purpose vehicle outfit for the acquisition of banks’ soured assets and loans.

The seven-year senior loan is approved for ACP Investments One Inc. (of Altus Capital Corp.) and is part of IFC’s “Debt and Asset Recovery Program”, a funding that assists banks and financial institutions to sell-off nonperforming assets. This off-loading frees up capital for banks for additional lending budget.

In a statement yesterday, IFC resident representative Jesse Ang said the IFC’s recovery program has enabled banks with distressed assets to dispose of some $21.5 billion in nonperforming loans. Once unloaded, banks increased credit to enterprises and the increased loan activity created more jobs.

“People were able to save their homes and other assets, while the enterprises’ renewed access to formal credit kept their businesses going and preserved existing jobs or created new ones,” said Ang.

The country’s largest banks are still burdened with P140 billion worth of nonperforming loans and about P135 billion in distressed real and other properties as of end-September this year.

In the same statement, ACP Investments President Benjamin C. Sevilla said the IFC loan will improve banks’ balance sheet as well as “encourage other investors to re-enter this market”.

“This effort will build the capacity of local asset managers by bringing in global best practices in asset resolution,” Sevilla added.

Altus Capital Corp. has been buying non-performing loans and distressed real-estate assets since 2005, including a P9-billion soured assets acquired from Rizal Commercial Banking Corp. and Plantersbank last year.

Source: http://www.mb.com.ph/ifc-approves-40-m-loan-to-spv/