MNTC retains top rating for P7-B bonds

MANILA, Philippines - The Philippine Rating Services Corp. has maintained its PRS Aaa rating for Manila North Tollways Corp.’s outstanding P7 billion bonds.

Based on the local credit watcher’s benchmarks, PRS Aaa-rated debt securities are deemed “of the highest quality with minimal credit risk” and the borrower’s capacity to meet its financial commitment is considered “extremely strong.”

MNTC’s bonds are due in two tranches: P4.4 billion maturing in 2021 and P2.6 billion due in 2024.

in assigning the rating, PhilRatings took into account MNTC’s ample liquidity and buffer to comfortably service debts, adequate capital structure, well-managed toll franchise and resilient demand for its toll services.

The rating also took into consideration the political pressures which could continue to cause further delays in the regular and contractual adjustments of toll rates

MNTC was incorporated in 1997 and began commercial operations in 2005. It is in the business of constructing, operating and maintaining toll roads.

At present, MNTC manages the 97.6 kilometer-North Luzon Expressway or NLEX.

Last February, MNTC and the Bases Conversion and Development Authority executed the business agreement which assigns to MNTC,BCDA’s rights, interest and obligations relating to the management of the Subic-Clark-Tarlac Expressway (SCTEX).

Upon Presidential approval of the Supplemental Toll Operation Agreement (STOA), SCTEX will soon be managed and operated by MNTC. With the integration of the SCTEX into MNTC’s portfolio of managed toll roads, MNTC will be the largest toll road operator in the Philippines with an aggregate length of 191.5 kilometers.

On March 19, MNTC opened Segment 9 of the NLEX Harbor Link project. It is a 2.42-km expressway providing alternate access to Valenzuela City and the Manila port areas. It is connected to the NLEX through the Smart Connect Interchange and runs up to MacArthur Highway in Karuhatan, Valenzuela City.

Philratings noted that further delays could occur in the regular and contractual adjustments of toll rates. The company is currently pursuing both its 2013 and 2015 toll adjustments with the Toll Regulatory Board.

At the same time, MNTC is also pushing for a provisionary adjustment while the TRB is still deciding on the 2013 and 2015 filings. To further insulate itself from the effect of delays in toll rate adjustments, the company also aims to grow its other non-toll income which includes: advertising revenues, leasing and rest-stop development.