NLEX Corp. to raise P25 B through fixed rate bonds

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A TOLLWAY unit of Metro Pacific Investments Corp. (MPIC) plans to raise P25 billion through the issuance of fixed rate bonds, with P6 billion slated to be offered for its initial tranche.

In a disclosure to the stock exchange on Friday, MPIC said its indirect subsidiary NLEX Corp. has filed a three-year shelf registration program for the issuance with the Securities and Exchange Commission. The company looks to use the proceeds of the offer for its upcoming projects, including the Radial Road 10 (R10) portion of its Segment 10 project.

R10 forms part of the P8-billion Segment 10 project, a 5.7-kilometer expressway spanning MacArthur Highway in Valenzuela City, Governor Pascual Ave. in Malabon City, and C3 Road in Caloocan City.

Local debt watcher Philippine Ratings Services Corp. (PhilRatings) gave the bonds a PRS Aaa rating with a stable outlook, which is the highest issuer rating in the company’s credit rating scale. This indicates that NLEX Corp. has the capacity to meet its financial obligations.

On the other hand, a stable outlook means that the rating is not likely to change in the next 12 months.

PhilRatings said it considered NLEX Corp.’s cash flow, capital structure, the management of its toll franchise, and the demand for toll service in coming up with the credit rating.

“In general, demand for NLEX Corp.’s services is considered resilient as the public continues to use the NLEX and SCTEX (Subic Clark Tarlac Expressway) despite factors such as volatile fuel prices and seasonality of travel, among others,” the debt watcher said in a statement.

NLEX Corp. has P7 billion in outstanding bonds, P4.4 billion of which is set to mature in 2021 and the remaining P2.6 billion due in 2024. PhilRatings maintained the PRS Aaa credit rating for these bonds.

MPIC is one of three Philippine units of Hong Kong-based First Pacific, along with PLDT, Inc. and Philex Mining. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains an interest in BusinessWorld through the Philippine Star Group, which it controls.

Shares in MPIC were down by four centavos or 0.69% to close at P5.75 apiece at the stock exchange on Friday. — Arra B. Francia