NLEX Corp. has secured clearance from the Securities and Exchange Commission (SEC) for its shelf registration of up to P25 billion in fixed rate bonds.
The SEC in an e-mail to reporters said it has approved NLEX’s registration statement for fixed rate bonds to be issued in several tranches within three years.
For the first tranche, NLEX looks to raise up to P4 billion with an oversubscription option of up to P2 billion from the issuance of seven-year Series A due 2025 and 10-year Series B bonds due 2028.
The Series A bonds are set to have a coupon rate of 6.46-6.76% annually, while the Series B bonds are at 6.7393-7.7023 per annum.
The company engaged BDO Capital & Investment Corp. as the issue manager, bookrunner, and joint lead underwriter. First Metro Investment Corp. will also act as joint lead underwriter.
NLEX targets to conduct the fund-raising on June 27, after which the bonds will be listed and traded at the Philippine Dealing & Exchange Corp.
Around P4.15 billion of the proceeds of the offer — should they fully exercise the oversubscription option — will be used to finance NLEX’s R-10 Section Project. The 2.6-kilometer toll road, which will extend the C-3 Road exit ramp to R-10 Road near the Port Area in Manila, will cost around P6.6 billion.
NLEX said it expected to start construction on the project within the second quarter of this year, with scheduled completion six months after that.
The company will use internally generated funds and external financing for the remaining balance of the construction costs for R-10, which it noted could be from following tranches in the shelf registration.
About P1.775 billion from the offer will be used for the company’s capital expenditures this year. Of this, P300 million will be used to fast-track the procurement of the contractor as well as preparations for the construction of its Connector Road project, an 8-kilometer elevated four-lane expressway linking the North Luzon Expressway (NLEx) and the South Luzon Expressway.
Another P300 million will be for the second phase of NLEx lane widening, while P250 million will be for the annual pavement resurfacing of 50.3 lane-kilometers in NLEx and 17.4 lane-kilometers in Subic Clark Tarlac Expressway.
The rest will be for the company’s other projects in various stages of construction.
NLEX Corp. is one of the tollways units of listed infrastructure conglomerate Metro Pacific Investments Corp. (MPIC). MPIC is one of three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arra B. Francia