Mandiri, BNI, Medco's ratings stable: S&P

The Jakarta Post, Jakarta

Standard & Poor's revised Thursday the outlook on the long- term counterparty credit ratings of state owned bank PT Bank Mandiri and the foreign and local currency counterparty credit ratings of publicly-listed state-owned bank PT Bank Negara Indonesia (BNI) to stable from negative.

The credit rating agency said in a statement that the outlook revisions followed the outlook revision by the agency on sovereign ratings of the Republic of Indonesia to stable from negative.

S&P also affirmed its single-'B'-minus long-term counterparty credit and senior unsecured debt ratings, and its 'C' short-term counterparty credit and triple-'C' subordinated debt ratings on Bank Mandiri.

It also affirmed its single-'B'-minus long-term local and foreign currency counterparty credit and senior unsecured debt ratings, and its 'C' short-term local and foreign currency counterparty credit ratings on BNI.

S&P raised Thursday Indonesia's long-term and short-term foreign currency rating to triple-'C' and 'C', respectively, from 'SD' (selective default), and assigned the foreign currency ratings a stable outlook.

In another press statement, the agency stated that the outlook on publicly-listed energy firm PT Medco Energi International remained stable at B plus.

It said Medco's financial results for the first half of 2002 are within its expectations, and do not affect the company's ratings.

Fiscal year 2002 is the first year the company reports its financial results in U.S. dollars.

For the first six months of 2002, revenue and net income rose 14 percent and 50 percent to US$207.7 million and $58.0 million from the preceding period, despite lower realized oil prices. The revenue rise was attributable to higher sales volumes for oil and methanol, as well as improved onshore rig utilization and daily rig rates.

Notwithstanding higher operating expenses, which led to operating margin deteriorating to 56 percent from 67 percent, net income was higher in the first half of 2002 due to the provisions made for doubtful receivables and foreign exchange losses in the first half of 2001, S&P said.

Although interest expenses were higher after the issuance of $100 million notes in early-2002, EBITDA interest cover remained relatively strong at 31.2 times. Total debt-to-capital was 17 percent at June 30, 2002, healthy for the rating level.

Furthermore, cash of $98 million provides the company considerable financial flexibility to fund its aggressive drilling program and asset acquisitions.