MRT-3 debt gets ratings upgrade

Philippine Ratings Services Corp., a debt watcher, has upgraded the rating of the Metro Rail Transit Line 3’s debt.

MANILA, Philippines—Philippine Ratings Services Corp. (PhilRatings), a debt watcher, has upgraded the rating of the Metro Rail Transit Line 3’s debt.

In a statement, PhilRatings said the asset-backed notes issued by MRT III Funding Corp. had been upgraded from PRS A minus to PRS A plus for the so-called Tranche 2-F. Its so-called Tranches 2G and 3 was upgraded from PRS A minus to PRS A.

A PRS A rating indicates favorable investment attributes considered as upper-medium grade obligations.

“Although obligations rated PRS A are somewhat more susceptible to the adverse effects of changes in economic conditions, the obligor’s capacity to meet its financial commitments on the obligations is still strong,” PhilRatings said.

The notes issue was the securitization of future dividends from Metro Rail Transit Corp. (MRTC), which operates MRT Line 3. The funds flow through a series of holding firms and special-purpose vehicles to MRT III Funding Corp.

The dividends arise from equity rental payments made by the Department of Transportation and Communications to MRTC under a 25-year build-lease-transfer agreement for the construction of the Light Rail Transit System Phase 1 in Metro Manila.

PhilRatings’ ratings are based on available information at the time that the rating review is ongoing, the statement showed.

The issue trustee, Bank of New York Mellon, has confirmed to PhilRatings in writing that it held a balance of $140.7 million as of May 30 this year.—Miguel Camus