NLEX to tap bond market in Q4

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NLEX Corp. listed P6 billion in Series A bonds at the Philippine Dealing & Exchange Corp. (PDEx) bourse on Wednesday. — PDS GROUP

By Arra B. Francia, Reporter

TOLL ROAD operator NLEX Corp. looks to brave the bond market anew by the fourth quarter of 2018 to finance the construction of the North Luzon Expressway — South Luzon Expressway (NLEX-SLEX) Connector Road.

“Hopefully by the latter half of this year, we will go back to the public bond market and raise bigger amounts of money. This time to fund what we call a game changer, this is the NLEX Connector Road which will start construction next year,” NLEX Corp. President and Chief Executive Officer Rodrigo E. Franco said at the listing ceremony of the first tranche of its shelf-registered bonds yesterday.

The unit of Metro Pacific Tollways Corp. (MPTC) needs financing for P16 billion out of the NLEX-SLEX Connector Road’s total project cost of P23 billion. Of this, 30% will be funded through equity and 70% will be through a combination of bonds or bank loans.

“Around P11-12 billion (from banks or bonds). We may do it in tranches. Construction is done over time. The bonds, we have to program it,” Mr. Franco told reporters after the listing ceremony.

The remaining P7 billion of the project cost will be spent for right-of-way acquisition, which Mr. Franco said can be paid over time.

The NLEX-SLEX Connector Road is an eight-kilometer elevated highway extending the NLEX southward from Segment 10 in C3 Road Caloocan City to the Polytechnic University of the Philippines in Sta. Mesa Manila, and also connecting the common point of Skyway Stage 3.

The highway is set to reduce travel time from Clark, Pampanga to Calamba, Laguna from three hours to one hour and 40 minutes, with expected usage of at least 35,000 vehicles per day.

Meanwhile, the company on Wednesday raised P6 billion from the issuance of Series A bonds due 2025 with a coupon rate of 6.6407% per annum and Series B bonds due 2028 carrying an interest of 6.9% per year.

The funds raised from the first tranche of the P25-billion bonds under shelf registration will be used to finance the company’s R-10 Section Project, a 2.6-kilometer elevated toll road set to extend the C-3 Road exit ramp of Segment 10 to R-10 Road near the Port Area.

NLEX Corp. started construction for the R-10 project last month, and is scheduled to be completed by the fourth quarter of 2019.

The issuance is the 11th listing at the Philippine Dealing & Exchange Corp. (PDEx) for the year, bringing the total new listings for the year to P88.81 billion.

With this, the Metro Pacific group now has a total of P31.5 billion worth of listed bonds in the PDEx, comprising 3.58% of the total outstanding face amount of P881-billion corporate bonds enrolled at the fixed income exchange.