Indonesia’s Medco Energi starts offer for 2025 notes, $190 million capped offer

By Mary-Katherine Stinson

Lexington, Ky., Oct. 12 – PT Medco Energi Internasional Tbk. launched an any and all cash tender offer for its 6¾% senior notes due 2025 and a $190 million capped tender offer for three senior notes, according to multiple announcements.

The cap is the aggregate purchase price of the early tender offer consideration and/or the late tender offer consideration excluding interest, which will also be paid.

The tender offer covers:

• Any and all of the $235,098,000 outstanding 6¾% senior notes due 2025 issued by Medco Platinum Road Pte. Ltd. (Cusips: 58406HAA8, Y59505AA8) for an early tender consideration of $1,012 or a late consideration $982 per $1,000 principal amount; and

• Up to $60 million of the $533,606,000 outstanding of the original $650 million of 7 3/8% senior notes due 2026 issued by Medco Oak Tree Pte. Ltd. (Cusips: 58405FAA3, Y59501AA7) for an early tender consideration of $1,000 or a late consideration of $970 per $1,000 principal amount;

• Up to $60 million of the $570,734,000 outstanding of the original $650 million of 6 3/8% senior notes due 2027 issued by Medco Bell Pte. Ltd. (Cusips: 58406LAA9, Y56607AA5) for an early tender consideration of $962.50 or a late consideration of $932.50 per $1,000 principal amount; and

• Up to $70 million of the $372.6 million outstanding of the 6.95% senior notes due 2028 issued by Medco Laurel Tree Pte. Ltd. (Cusips: 58406R AA6, Y59500 AA) for an early tender consideration of $955 or a late consideration of $925 per $1,000 principal amount.

The early considerations listed above include $30 early tender premiums that will not be paid to noteholders who tender their notes after the early deadline.

Notes tendered before the early deadline will be given acceptance priority over notes tendered after the early deadline.

The outstanding amount of the 2025 notes amount reflects $235,398,000 principal amount less $300,000 of the 2025 notes that have been repurchased but not yet canceled.

The outstanding amount of the 2027 notes reflect $590,095,000 principal amount less $19,361,000 of the 2027 notes that have been repurchased but not yet canceled.

The outstanding amount of the 2028 notes reflect $384.8 million principal amount less $12.2 million of the 2028 notes that have been repurchased but not yet canceled.

All of the notes are guaranteed by Medco Energi as parent guarantor.

None of the tender offers are subject to any financing condition but are conditioned on the satisfaction or waiver of certain conditions.

Tenders may be subject to proration.

The company intends to reprofile its debt maturities by replacing debt with bullet repayment with loans that have amortized repayment schedules. Notes purchased in the offers will be retired and canceled.

Funding for the offer will come from a combination of cash on hand, which includes proceeds from the parent guarantor’s shelf bonds V phase I in an aggregate amount of Rp 1 trillion issued on July 7, 2023, and borrowings under the parent guarantor’s credit facility agreement signed on Sept. 14 for a maximum amount of Rp 5.25 trillion with a 57-month tenor.

The early tender deadline is 5 p.m. ET on Oct. 25, also the withdrawal deadline.

The expiration deadline is 5 p.m. ET on Nov. 9.

Results will be announced on Nov. 10.

Settlement is planned for Nov. 15.

ING Bank NV, Singapore Branch (+65 6232 6289, +44 20 7767 6784, liability.management@ing.com), Mandiri Securities Pte. Ltd. (+65 6589 3890, dcm.group@mandirisekuritas.co.id), Morgan Stanley Asia (Singapore) Pte. (800 624 1808, 212 761 1057, +44 20 7677 5040, 852 2239 1484, debt_advisory@morganstanley.com) and Standard Chartered Bank (Singapore) Ltd. (+44 20 7885 5739, 852 3983 8658, +65 6557 8286, liability_management@sc.com) are the dealer managers for the tender offers.

Morrow Sodali Ltd. is the tender and information agent (+852 2319 4130, +44 20 4513 6933, 203 609-4910, medco@investor.morrowsodali.com). All documents for the offers will be made available on the offer website at https://projects.morrowsodali.com/medco.

The parent guarantor also announced on Oct. 12 its intention to commence an offering of new dollar-denominated senior notes to be issued by Medco Maple Tree Pte. Ltd. The tender offers are not conditioned on the new notes’ issuance.

In addition to the tender offers, Medco Platinum Road has had the right to redeem the 2025 notes, in whole or in part, since Jan. 30, 2022, and during the 12-month period starting on Jan. 30, 2024. According to the notice, the company intends to exercise its right to redeem all of the then-outstanding 2025 notes after Jan. 30, 2024 at a redemption price of 100.844, which is the set redemption price under the notes’ terms.

Medco Energi is a Jakarta, Indonesia-based energy and natural resources company.

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