S&P gives Medco notes B+

S&P said it gave its B+ long-term issue rating to a planned offering of dollar-denominated senior unsecured notes by Medco Laurel Tree Pte. Ltd., a wholly owned indirect subsidiary of PT Medco Energi Internasional Tbk., which will guarantee the notes.

“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 proceeds will be placed into an escrow account, with conditions on drawdown for either acquisition or refinancing Medco's current indebtedness. If the proceeds have not been used for either of the above before Sept. 30, 2022, Medco will apply the proceeds toward refinancing.

The outlook is negative.

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