MNTC needs P2.8 billion for 2nd phase of NLEX project

The Lopez-controlled Manila North Tollways Corp. (MNTC) needs P2.8 billion to construct a portion of the second phase of its multi-billion peso North Luzon Expressway (NLEX) project.

MNTC president and chief executive officer Jose "Ping" de Jesus said the company is preparing to build a six-kilometer toll road system from Mindanao Ave. to NLEX to McArthur Highway. This forms part of the second phase development for the NLEX project.

De Jesus said construction of the expressway may take one-and-a-half to two years. Funding, he said, will come from new borrowings and internally-generated cash.

MNTC recently closed a $210 million refinancing facility with a consortium of global and local financial institutions led by ING Bank N.V. and Mizuho Corporate Bank Ltd. Of the total, $100 million represented a long-term dollar facility arranged by Mizuho and the balance represented seven-year fixed rate corporate notes.

De Jesus said the facility will be used to partially redenominate MNTC’s dollar-denominated loans into local currency, effectively reducing its vulnerability to foreign exchange fluctuations.

"A good project like the NLEX must not suffer simply because we have not shielded it from risks - financial or otherwise. Our financing transaction will provide us a stronger balance sheet to support initiatives that we intend to pursue to further improve service to our motorists, " said de Jesus.

MNTC chairman Oscar M. Lopez said the overwhelming support from lenders manifests investors’ confidence in the company’s long-term viability and strong financial performance. He said investors’ and creditors’ vote of confidence is given to projects "that are judiciously managed and those that yield planned results."

MNTC’s financial strength was likewise assigned a "PRS Aaa" rating by Philratings on the fixed-corporate notes issue – the highest possible credit rating on the rating agency’s domestic rating scale.

This credit rating was attained despite the lack of a government guarantee supporting the project. MNTC increased the issue size by 83 percent to P5.5 billion from the originally planned P3 billion after receiving subscriptions amounting to P7.1 billion.

MNTC is the builder of the 84-kilometer NLEX, one of the biggest infrastructure projects in the country in the last 10 years.

MNTC is majority owned (67.1 percent) by First Philippine Infrastructure Development Corp., which in turn is owned by First Philippine Holdings Corp. and Benpres Corp. of the Lopez group. Other shareholders include Leighton Asia Ltd. with a 13-percent stake, Egis Projects S.A. (16.8 percent) and the Philippine National Construction Corp. (2.5 percent).