Moody's: Medco Energi bonds B2

Moody's Investors Service said it assigned a definitive B2 corporate family rating to Medco Energi Internasional Tbk.

Moody's also said it assigned a definitive B2 rating to the $400 million dollar-denominated backed senior unsecured bonds issued by Medco Strait Services Pte. Ltd., a wholly owned subsidiary of Medco.

The bonds are irrevocably and unconditionally guaranteed by Medco and some of its subsidiaries, the agency said.

The outlook is stable.

The ratings follow the company's completion of its dollar-denominated bond issuance, final size and the terms and conditions of which are consistent with expectations, Moody's said.

The proceeds from bonds of about $383 million, including the proceeds from the tap, will be used to fund interest reserve account of about $17 million, repay the outstanding loan for its Natuna project of $220 million and repay the outstanding Singapore-dollar bonds of $72 million, the agency explained.

The remaining proceeds of about $74 million will be kept in an escrow account for repayment of other debt maturing over the next 12 months, Moody's added.

The stable outlook consider the expectation that production growth from Medco's existing fields will improve cash flows and company will remain committed to de-leveraging, such that its credit metrics will remain appropriate for its ratings over the next 12 to 18 months, the agency said.

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