Private Puerto Rico tollway operator may sell municipal bonds
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A subsidiary of Spanish highway operator Abertis is considering borrowing $424 million to fund capital projects for four Puerto Rico toll roads.
The Public Finance Authority, a Wisconsin-based conduit issuer, approved the municipal bond sale for Puerto Rico Toll Roads LLC, at a June 26 board meeting. PFA would loan the proceeds it borrows to Puerto Rico Toll Roads, which is part of Metropistas, an Abertis subsidiary that
When Hurricane Maria hit Puerto Rico in 2017, PR-22 and PR-5 sustained less damage than publicly run roads, said Adrian Garza, a Moody’s Ratings analyst. Concession agreements typically require private companies to operate and maintain infrastructure to defined standards, he said.
The roads managed by Metropistas are “very resilient even in economic downturns and we’ve seen road traffic pick up following the pandemic, following hurricanes,” Garza said. “Every shock that the island or city has suffered, traffic really bounces back very quickly.”
In January, the ratings agency upgraded $435 million of senior taxable notes issued by Metropistas to the investment-grade rank — Baa3 — from Ba1. Moody’s cited traffic recovery on PR-22 and PR-5 after the pandemic, solid revenue structure and resilience in the face of Puerto Rico’s weak economy.
Traffic on PR-22 and PR-5 rose 4.9% in 2023 from the prior year, according to Moody’s. The increase reflected tourism growth as well as a lower base of traffic in 2022, caused by the Covid-19 Omicron variant and Hurricane Fiona, the rating company said.
“Metropistas provides an essential service as a primary way of entry to San Juan — the capital city of Puerto Rico — that lacks quality alternative roads and viable public transportation,” Moody’s wrote in the January release. “As a result, traffic trends have been largely immune to Puerto Rico’s weak economic performance.”
