MNTC notes get highest credit rating

Philippine Rating Services Corp. (PhilRatings), the country’s leading credit rating agency, has retained its highest grade of PRS Aaa to Manila North Tollways Corp.’s P 5.5-billion fixed-rate corporate notes (FXCNs).

PhilRatings said a rating of PRS Aaa is given to securities with the smallest degree of investment risk. “Interest payments are protected by a large or by an exceptionally stable margin and principal is secured. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.”

MNTC built the 84-kilometer North Luzon Expressway, one of the biggest infrastructure projects in the country over the past 10 years.

In retaining the rating, PhilRatings took into consideration MNTC’s key strengths — continued earnings generation with sufficient cash flows for debt service, greater financial flexibility, improved capital structure and reduced foreign exchange exposure, improved traffic flows in NLEX and supportive concession framework appropriate for a progressive regulatory environment.

“The continuing growth in revenues is assured by the patronage that MNTC enjoys from motorists who are apparently satisfied both by the service and the toll rates. The strategic importance of NLEX for North Luzon land transport – where there is no real competition from an alternate roadway – establishes the stability of the market. This stability is very much reinforced by a management consistently attentive to the needs of its motorists,” PhilRatings said.

 “A supplemental toll operation agreement that by now has been tested for its adequacy to guide relations with regulatory authorities, continues to provide a platform to encourage MNTC to maintain and expand its services – and carry on with a momentum of profitability that supports its improving financial strength,” PhilRatings added.

MNTC is 67.1 percent-owned by First Philippine Infrastructure Development Corp., a unit of First Philippine Holdings Corp. and Benpres Corp. of the Lopez group.

Other shareholders of MNTC include Leighton Asia Ltd. with a 13-percent stake, Egis Projects S.A. (16.8 percent) and the state-run Philippine National Construction Corp. (2.5 percent).