The project entails an investment in equity and debt, along with strategic partners, to create a platform to acquire and service a Distressed Asset (“DA”) portfolio of Planters Development Bank (“Plantersbank” or the “Bank”). The portfolio will be acquired through a to-be-formed Special Purpose Vehicle (“SPV”). The DA portfolio contains non-perfoming loans (“NPL”) and real and other properties owned or acquired (“ROPOAs”) with a face value of around US$71 million.

Through the proposed project, IFC can play a critical role to help re-activate the DA market in the Philippines, mobilize funding from the private sector to help address the limited capital currently available in the local NPL market, and provide Plantersbank with a mechanism for NPL resolution which will allow it to increase lending to its customers.

The proposed project is part of IFC’s Debt and Asset Recovery Program (“DARP”), a crisis response initiative approved by the Board in August 2009, which focuses on DAs, roll-over risk and restructurings. DARP’s strategy is to revitalize financial systems through investments in DA and servicing companies / platforms.