Jakarta. Medco Energi Internasional, a listed oil and gas company controlled by Indonesian tycoon Prajogo Pangestu, plans to raise up to $650 million from dollar-denominated bonds later this month to refinance debts due this year and next year, an executive of the company said on Sunday.
Medco plans to meet potential investors in a roadshow on Thursday and Friday to gauge investors' interest and determine the final size of the bond issuance, Siendy Wisandana, the company's head of corporate counsel and corporate secretary, said.
"Morgan Stanley, Standard Chartered Bank, Societe Generale, Credit Suisse, DBS Bank and Mandiri Sekuritas will handle the bidding," Siendy said.
Moody's Investors Service has given a B1 rating with a stable outlook for the dollar-denominated bonds, which will be issued by Medco's Singapore-based special purpose vehicle Medco Bell.
"The B1 rating reflects Medco's improved scale and the geographic diversification of its reserves and production following the acquisition of Ophir," Moody's senior vice president Vikas Halan said in a statement last week.
Medco acquired Ophir Energy, a London-based oil and gas firm with oil wells in Africa, Asia and Mexico, for 408 million pounds sterling last year. The company had expected its production to increase to 110,000 barrels of oil per day (bopd) in 2019 – after taking into account Ophir's production capacity – from 87,000 bopd in 2017.
Medco's proved reserves also rose to 249.3 million barrels of oil equivalent (boe) at the end of September last year from 234 million at the end of 2017, Moody's said.
"Medco's credit metrics and liquidity are also supportive of its B1 rating. We expect the company's debt/EBITDA to improve to below 4.0x in 2019 from 4.4x in 2018. This is despite the increase in its debt to fund the acquisition of Ophir Energy in 2019," Halan said.
S&P Global Ratings also gave a long-term B+ rating with a stable outlook to Medco's proposed bond issuance, with the assumption the company would maintain its current production volume and growth aspiration for the next 12 to 24 months.
"We estimate Medco will maintain production of around 110 thousand boe and an operational proceeds to debt ratio close to 15 percent in 2020-2021," S&P wrote in a statement last week.
According to its latest financial statement, Medco has three outstanding dollar-denominated bonds on its balance sheet. A $400 million global bond on an 8.5 percent interest due on Aug. 17, 2022; a $500 million bond on a 6.75 percent interest due on Jan. 30, 2025; and a $650 million bond on a 7.375 percent due on May 14, 2026.
2020-01-13 11:30:06Z
https://jakartaglobe.id/business/medco-set-to-issue-650m-in-global-bonds-to-refinance-debts
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