MNTC gets highest credit rating

MANILA, Philippines - Manila North Tollways Corp. (MNTC), the private concessionaire for the North Luzon Expressway (NLEX), has obtained the highest credit rating from the Philippine Rating Services Corporation (PhilRatings).

MNTC, a member of infrastructure conglomerate Metro Pacific Corp.,  was assigned an issuer rating of PRS Aaa, which  means that the company has a very strong capacity to meet its  financial commitments relative to that of other Philippine corporations.

In assigning the rating, PhilRatings took into consideration MNTC’s sound liquidity, improving capital structure, well-managed toll franchise and the resilient demand for its toll services.

According to PhilRatings, MNTC’s liquidity remains sound with a significant amount of cash coming from operations in the last three years.

“The nature of MNTC’s operations provides daily inflows of cash from toll collections, thus allowing the company to build up sufficient internally-generated cash which can amply cover its debt service requirements.  Similar to historical performance, cash will continue to be internally-generated in 2013 and 2014,” PhilRatings said.

MNTC’s outstanding long-term borrowings mostly had fixed interest rates and were in local currency at the end of 2012.

The company plans to optimize its debt capacity to finance the construction of Segment 10 of the Harborlink Project, targeted for the first quarter of 2014.

PhilRatings said demand for MNTC’s services is resilient as the public continues to use the NLEX despite higher fuel costs, toll hikes and seasonality of travel, among others.

It noted that no other toll road serves central and northern Luzon from Metro Manila, and no functioning railway competes for commuter travel or freight.  The only directly competing route from Metro Manila to central and northern Luzon is MacArthur Highway which is a non-toll road.