Moody's confirms Medco Energi

Moody's Investors Service said it confirmed PT Medco Energi Internasional Tbk's B2 corporate family rating and the B3 senior unsecured rating for its senior 8 ¾% bonds due 2010, as issued by MEI Euro Finance Ltd.

The outlook is negative.

The confirmation completes a review for possible downgrade that began in April.

The confirmation reflects Medco's successful recent issuance of new Rp1.5 trillion in local-currency bonds to meet its funding requirements, Moody's said.

While its near-term liquidity risk has been alleviated, Moody's said it continues to have credit concerns over the ongoing reduction in Medco's reserves and production base as well as the high level of capital expenditure it needs to spend to sustain production and reserves replacement.

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