PhilRatings affirms high marks for MNTC notes

MANILA, Philippines - The Philippine Rating Services Corporation (PhilRatings) affirmed its high rating for the Manila North Tollways Corp.'s (MNTC) four-year fixed rate corporate notes, indicating its strong capacity to meet its financial obligations. MNTC, the concessionaire of the North Luzon Expressway (NLEX) and a unit of Metro Pacific Tollways Corp., will raise P5.5 billion from the sale of fixed rate corporate notes that will mature in 2013. PhilRatings has maintained its rating of PRS Aaa – its highest – for the 67.1-percent subsidiary of listed Metro Pacific Investments Corp. owing to its strong cash flow generation, better debt structure, and stable recurring income. “MNTC’s internal cash generation has always been positive and more than sufficient to pay interest and current portion of debt," PhilRatings said. “This trend is expected to continue given that MNTC’s business generates a significant amount of cash. Revenues are largely collected in cash on the same date service is rendered. While projections provide for additional debt financing in 2009-2010, funding will remain largely internally generated as in previous years," the ratings agency added. MNTC was formerly owned by the Lopez Group through its infrastructure arm First Philippine Infrastructure Development Corp. (FPIDC) but was later on acquired by MPIC. The company has been renamed Metro Pacific Tollways Corp. The Toll Regulatory Board, which regulates all toll roads, approved MNTC's request to adjust the authorized toll rate formula while it was also permitted to integrate the operation of the first phase and partial phase two of the NLEX. "PhilRatings will continue to monitor developments in relation to MNTC and can adjust its credit rating for the notes should circumstances warrant a rating change," the ratings agency said. Traffic volume in the NLEX has been fairly stable, with minimum traffic base ranging from 140,000-150,000 vehicles per day. Besides continuing to provide the fastest and most comfortable route for North-bound motorists, the NLEX will be further enhanced by the opening of the Subic-Clark-Tarlac Expressway (SCTEX) and the construction of Segment 8.1 which will connect Mindanao Avenue to the expressway. Segment 8.1 is a 2.7-kilometer roadway linking Mindanao Ave. in Quezon City to the NLEX main gateway in Valenzuela City. The project will have 2x2 lanes, a two-way service road, and a clover leaf interchange north of Balintawak toll plaza. Segment 8.1 is expected to be completed on or before April 30, 2010 with Leighton Contractors (Philippines), Inc. as civil works contractor. A seven-year loan facility extended by the Lucio Tan-controlled Philippine National Bank as arranged by the PNB Capital and Investments Corp. Beginning full commercial operation in February 2005, the first phase was the 84-kilometer NLEX main starting in Balintawak, Caloocan and ending in Sta. Ines, Mabalacat, Pampanga. Last week, MNTC started the second phase of a road project that will provide access to the highway from all four directions. Spanning 22.48 kilometers, the P2.1 billion thoroughfare is expected to ease traffic congestion in Metro Manila. - GMANews.TV