C&P Homes, Inc.

October 4, 1999 PSE CIRCULAR FOR BROKERS NO. 2501-99 SUBJECT : C&P Homes, Inc. This is with reference to the article entitled "No Manny, no honey" published in the October 1, 1999 issue of the Philippine Daily Inquirer. The article reported that a notice of default on C&P Homes, Inc. ("CMP"), reported by Internal Financing Review Asia, was made by the Law Debenture Trust of London upon the insistence of the holders of $150-million floating rate notes (FRNs) issued by CMP. Said default call was issued on September 16 and CMP has 30 days to cure the default otherwise the FRNs, which do not mature until January 2003, will be called as due and payable. In its letter, CMP clarified that: ". . . C&P Homes, Inc. had not received a "notice of default" from the Law Debenture Trust Corporation of London. Rather, what the company received was a notice requiring it to cure the violation of two covenants relating to its stockholders' equity under its Floating Rate Notes (FRN) Trust Deed - the covenant to retain a Tangible Net Worth of P11 Billion and to keep its real estate held for sale to equity ratio at a maximum of 1.2:1 - and giving the company 30 days to cure the same violation. It is only if and after the company shall have failed to cure the same violations will the FRN holders have the option to declare the company in default. . . . You will also recall that in July 1999, the company disclosed the approval by its Board of Directors of the increase in its authorized capital stock from P5B to P15B. Said capital increase, which was duly approved by the stockholders of the company on September 3, 1999, should pave the way for an additional equity infusion into the company. The company is presently arranging an informal meeting with the FRN holders for the purpose of updating them of the foregoing efforts of the company." For your information. (SGD.) JOSE LUIS U. YULO President and CEO