Urban Bank, Inc.

July 21, 1998 PSE CIRCULAR FOR BROKERS NO. 1677-98 SUBJECT : Urban Bank, Inc . Urban Bank, Inc. ("URB") confirmed to the Exchange, in a letter dated July 16, 1998, the attached news articles published in the Philippine Daily Inquirer and Philippine Star both dated July 11, 1998 which reported of URB's entry into a trust servicing agreement with Equitable Banking Corporation ("EBC") governing the issuance of P500 million worth of mortgage-backed securities and the issuance of a letter of credit under the Commodity Credit Corp.'s GSM 102 credit guarantee program, respectively. URB in said letter explained that: "With regard to the trust and servicing agreement with EBC, please be informed that this is the same document which had been long approved by the Securities and Exchange Commission (SEC hereinafter), relative to the Bank's filing of a Registration Statement covering PHP 500 million worth of asset-backed securities which Registration Statement was rendered effective by the SEC on November 29, 1996. The proposed Trustee Bank then was DBP. Considering that there was no Trust and Servicing Agreement that was duly executed by the parties, an amended registration was filed, whereby changes were made in the composition of the trustee bank (now EBC) and the asset pool. As for the $4.8 million deal under the Commodity Credit Corp.'s GSM 102 credit guarantee program, please be advised that this transaction is an ordinary bank loan transaction which falls within the normal, ordinary course of business of an expanded commercial bank, similar to the Bank's accreditations with other government-sponsored financing programs. The only item of note in this transaction is the fact that this was the first time the Bank was accredited under the GSM program." A copy of URB's Registration Statement is available for reference at the PSE Library and PSE Plaza Administration Office. For your information. (SGD.) REYNOLD P. ONG Vice-President, Listings and Disclosure Group Urban Bank, Equitable sign P500-M securities agreement BY TINA ARCEO-DUMLAO URBAN Bank Inc., one of the country's more aggressive commercial banks, and Equitable Banking Corp. are set to enter into a trust and servicing agreement governing the issuance of P500 million worth of mortgage-backed securities. Urban Bank originally entered into a trustee agreement with the Development Bank of the Philippines, with the registration statement of the mortgage-backed securities submitted for approval to the Securities and Exchange Commission. Urban Bank senior vice president Corazon Bejasa informed the SEC that the bank amended its registration statement to reflect the change in the trustee bank and the composition of the asset pool for the mortgage-backed securities. The registration statement provides for the issuance of P500 million worth of mortgage-backed securities divided into Class A and R securities. Some P400 million worth of Class A certificates will yield one percent per annum, over the base rate to be computed based on the weighted average rate of 91-day treasury bills. LexLib Class R certificates will have an expected yield rate of one percent per annum, over the base rate, plus/minus a pro-rate share in the residual earnings/losses of the surplus reserve account. The asset pool comprises outstanding loans and obligations, including revolving lines or credit secured by real estate mortgages as of June 10 this year. These assets include properties of Asiaworld Properties Philippines Inc., valued at P867-812 million, LRW Realty and Development Corp., P16.337 million, Ray Burton Development Corp. and Asia Cathay Realty Corp. The SEC and the Philippine Stock Exchange are currently drawing up guidelines in preparation for the eventual listing of the mortgage-backed securities at the local bourse. Urban Bank closes deal for US wheat By TED P. TORRES Urban Bank has closed a $4.8-million deal with a multinational corporation for the importation of US wheat under the Commodity Credit Corp.'s (CCC) GSM 102 credit guarantee program. Earlier, the bank was granted a $6-million credit line to finance Philippine imports of US agricultural commodities under the CCC/GSM program. The credit line was granted by the Agricultural Cooperative Bank (CoBank) of the US. LLjur CoBank is the main financier of US agri exports and international banking services for US agri products. The GSM transaction was accredited by the United States Department of Agriculture (USDA) which launched a $545-million guarantee for ASEAN member states to facilitate the importation of US agricultural products an commodities. The entire package is actually worth $1-billion credit line devoted solely for the importation of US agricultural products by the Asean countries. The allocations are as follows: Philippines ($102 million); Indonesia ($410 million); Malaysia ($100 million); Thailand ($300 million); and the rest of Southeast Asia including Singapore ($90 million). In a press statement, US Agriculture Secretary Dan Glickman said that the credit guarantee facility will be advantages for the assured sale of US agri exports. "Today's increase in guarantees will help maintain the competitiveness of US agricultural exports to the Southeast Asian region," Glickman said. "Buyers in these markets bought more than $3 billion in US agricultural goods in 1997, and we want to ensure that our future sales remain strong." The Urban Bank transaction is the first in the GSM credit guarantee program. In the Philippines, eight commercial banks were accredited by the USDA as the conduit for the GSM guarantee program. Aside from Urban Bank, the seven banks are the Philippine National Bank, Allied Bank, Bank of the Philippine Islands, equitable Bank, PCIBank and the United Coconut Planters Bank. prLL