RCBC to register two to three more SPVs

The Rizal Commercial Banking Corp. (RCBC) will register two to three more special purpose vehicles (SPVs) after the initial sale of P3.9-billion worth of its non-performing loans (NPLs) to Lehman Brothers.

RCBC has total non-performing assets (NPAs) of P24 billion, composed of real and other properties owned and acquired (ROPOA) and NPLs.

According to the bank’s vice chairman Cesar Virata, they are still talking with Lehman Bros. and other interested parties for the disposal of its NPAs. They will also be seeking an extension of the SPV Law which is set to expire in April next year.

The existing law sets on Sept. 14 the deadline for the registration of the SPVs, which would entitle these entities to several tax incentives and other perks.

RCBC president Francisco S. Magsajo confirmed that they are forming "buckets" of bad assets which will eventually be the same components of the SPVs that would be disposed. Each SPV must have a minimum capital of at least P31 million.

By registering the SPVs with the accompanying "buckets" of bad assets would allow them to avail of the incentive packages under the law even if they have not finalized any deal with an asset management company (AMC).

RCBC had earlier formalized its sale and purchase agreement with Philippine Investments One Inc., an AMC under the banner of Lehman Bros., for the sale of P3.9-billion worth of NPLs. It is the second successful sale of bad assets via the SPV route.

Last July, the Bank of the Philippine Islands (BPI) also sold P8.6 billion of its bad assets to Morgan Stanley Emerging Markets Inc.