PhilRatings affirms "Aaa" grade of MNTC bonds

The P5.5-billion outstanding five-year notes issued by the toll way unit of Pangilinan-led Metro Pacific Investments Corp. (MPIC) got an "Aaa" grade from debt watcher Philippine Rating Services Corp. (PhilRatings). In a statement Tuesday, the rating firm cited the Manila North Tollways Corp.’s steady revenue stream, which should be enough to cover any of the company’s maturing obligations. It said that "Aaa" is the highest grade it assigns to a company’s debt. "Obligations rated 'Aaa' are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong." MNTC's P5.5-billion five-year notes will mature in November 2013. “In arriving at the rating, PhilRatings considered the strong cash flow generation and improved level of operating income of MNTC," it said. MNTC is the concessionaire of the 84-kilometer North Luzon Expressway (NLEx), the main artery connecting Metro Manila to provinces in the north. NLEx has a stable traffic volume of 140,000 to 150,000 vehicles a day. “As such, MNTC is assured of stable cash flow," according to PhilRatings. PhilRatings also considered the likelihood that MNTC would bag the contract for the 94-kilometer Subic-Clark-Tarlac Expressway (SCTEx), further improving the firm’s cash flow. “While such projects may result in heavy [spending] and higher debt in the medium- to long-term, such are seen to enhance MNTC’s position as toll concessionaire and will strengthen and diversify the company’s sources for cash generation over time," PhilRatings said. MNTC posted an operating income of P762 million in the first three months of the year, up 22.1 percent from a year earlier, as traffic increased by 5.6 percent to 157,830 vehicles per day. Its net income grew 36 percent year-on-year to P435.5 million. —VS, GMANews.TV