Section 5Sec./Art. 5

Powers of an SPV. An SPV shall have the following powers:

(a) To invest in, or acquire NPAs of FIs;

(b) To engage third parties to manage, operate, collect and dispose of NPAs acquired from an FI;

(c) To rent, lease, hire, pledge, mortgage, transfer, sell, exchange, usufruct, secure, securitize, collect rents and profits, and other similar acts concerning its NPAs acquired from an FI;

(d) In case of NPLs, to restructure debt, condone debt and undertake other structuring debt, the SPV may reduce the principal, interest, interest rates, and the period for calculating the interest, extend the time for debt repayment or relax the conditions for debt repayment, agree to the conversion of the borrowers debt to equity in the borrower's business, agree to a transfer of assets or claims from the borrower t repay the debtor dispose of some of the borrower's property or claims to third persons;

(e) To take, transfer shares or buy shares issued by the borrower for the purpose of business reorganization or rehabilitation of the borrower, subject to the provisions of the Corporation Code in respect of the rights of the shareholders of the borrower company, and apply any other measures or restructuring techniques with the approval of the Commission;

(f) To enter into dation in payment (dation en pago) arrangements, foreclose judicially or extra-judicially and other forms of debt settlement involving NPLs;

(g) To spend funds to renovate, improve, complete or alter its NPAs acquired from an FI;

(h) To issue equity or participation certificates or other forms of IUIs for the purpose of acquiring, managing, improving and disposing of its NPAs acquired from an FI;

(i) To borrow money and issue other instruments of indebtedness for the purpose of paying operational administrative costs;

(j) To guarantee credit, accept or intervene for honor the bills of borrowers;

(k) To advance funds to borrowers where required by an acquired asset or any debt restructuring agreement pursuant thereto, or under any court order or rehabilitation plan; and

(l) To entrust to third parties asset servicing company, the collection and receipt of the debt payments for debts under debt restructuring business reorganization, management and disposition of assets of the SPV in accordance with the rules, procedures and conditions prescribed by the Commission or by the courts. Except in the case of ROPOAs whose redemption periods have already expired, the SPV shall notify the borrower and all persons holding prior encumbrances upon the properties or a part thereof or are actually holding the same adversely to the borrower within fifteen (15) days from the date of the appointment of the said collection agent.