Medco proposed notes rated B+

Medco proposed notes rated B+

JAKARTA: International rating agency Standard & Poor's (S&P) assigned its B+ rating to Indonesian oil and gas company PT Medco Energi International with senior unsecured notes issue of around US$200 million due in 2010.

Proceeds from the new debt will be used primarily to fund Medco's acquisition of petroleum assets in 2003 and its intensive exploration.

In a press release, S&P said Medco's $200 million debt is within S&P's expectation of Medco's capital structure, whereby total debt to capital could rise to 50-60 percent (from 16 percent in December, 2002) in the near-to-medium term, depending on the implementation of planned activities and acquisition.

S&P also said the rating reflected the company's short proved reserves life index of 4.8 years, which explains the company's plans to acquire producing oil blocks in 2003, in addition to developing its gas reserves, to immediately add to its proven reserve base and production volume. -- JP