MRT III Funding Corp settles $33.9-million asset-backed notes

MANILA, Philippines - MRT III Funding Corp. has settled $33.885 million worth of asset-backed notes due this month.

Domestic credit rating firm Philippine Rating Services Corp. said it has “received written confirmation from Bank of New York Mellon for the MRT III Funding asset-backed notes that timely payment amounting to $33.885 million was made for the Tranche 2-C Notes.”

Funding for the payment of Tranche 2-C was built up via scheduled deposits to the collection account of MRT III Funding Corp. with BoNY Mellon, as committed by Metro Rail Transit Corp. (MRTC) in a letter to PhilRatings dated May 5, 2010.

Principal payments for Tranches 1, 2-A and 2-B which were due in 2007, 2008 and 2009, respectively, were similarly made on time even with previous delays in deposits to the collection account.

The remaining note tranches will be maturing from 2011-2025. The next payment of $81.464 million will be due on Aug. 8, 2011 for the zero-coupon Tranche 2-D of the notes.

PhilRatings said it would closely monitor the regular build-up or remittance of funds to ensure that Tranche 2-D will be paid on time.   

The asset-backed notes issue is a securitization of future dividends from MRTC which flow through a series of holding companies and special purpose vehicles, to MRT III Funding Corp., the issuer of the notes. The dividends arise from equity rental payments made by the Department of Transportation and Communication (DOTC) to MRTC under a 25-year build -lease-transfer (BLT) agreement for the construction of the Light Rail Transit System, Phase 1 (LRTS Phase 1, or MRT) in Metro Manila. 

The asset-backed notes are currently rated PRS Baa minus. An obligation rated PRS Baa exhibits adequate protection parameters. However, adverse economic conditions and changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. PRS Baa-rated issues may possess certain speculative characteristics. A minus sign further qualifies the rating.

PhilRatings is the country’s pioneer domestic credit rating agency, accredited by both the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission. The agency has 25 years of experience in providing credit ratings to promote the development of the Philippine capital market.