S&P rates Medco notes B+

S&P said it assigned its B+ long-term issue rating to a proposed issuance of dollar-denominated senior unsecured notes by Medco Bell Pte. Ltd., a subsidiary of PT Medco Energi Internasional Tbk. The proposed notes will be guaranteed by Medco Energi.

Medco expects to use the proceeds for refinancing.

Medco’s rating reflects the company’s investment appetite to sustain production at mature assets, seize inorganic growth opportunities and develop its highly indebted power business. Some regulatory risk in Indonesia, where most of the company’s production is based, also weighs on its creditworthiness. Medco’s midsize production scale and adequate reserves, cash flow stability thanks to a high proportion of gas sold at a fixed price and manageable debt-servicing requirements temper these weaknesses, the agency said.

“We rate the notes B+, the same as the issuer credit rating on Medco, because Medco primarily operates in Indonesia, a jurisdiction where we believe the priority of claims in a theoretical bankruptcy is highly uncertain,” S&P said in a press release.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.