I have property in the Philippines Just wondering if any-one had any ideas on how to get a line of credit against it Philippine interest rates are very high. Something like 12% I beleive. I have heard the Bank of East China operates there with interest rates of 6%. I have also heard that if you have an adress outside of Australia you can get cheap rates in HongKong like about 2%. Have you got any clues Terry? Thanks
If you get a recognized bank in the Philippines to issue a stand by LC (letter of credit) to nab, they can take it as security. A stand by LC is more or less a bank guarantee (let’s say HSBC take the secuity and then offer NAB a guarantee – NAB security is now a guarantee from HSBC). NAB have a list of banks they accept stanby LCs from. If they are issued in Australian dollars nab lends up to 100%. If the standby LC is in another currency they have a reduced lending margin to cover exchange fluctuations.
Problem is you need to get the standby LC approved in the Philippines. The fees you pay for both parties may make it a bit of a nightmare. Finding a business banker with experience in this field is even harder.
Other issue is that unless you are dealing in millions – you will struggle getting anyone at NAB to to help – They won’t do it for a couple hundred grand…
You need a pretty large scale of lending for this to become cheap.
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