Medco Energi Internasional Tbk (MEDC) has issued USD 300 million bonds through its subsidiary Medco Strait Services Pte Ltd. Proceeds will be used to pay off Natuna 2016 facility and the medium term notes (MTN) program of 2015.
Bonds listed on the Singapore Exchange Securities Trading (SGX-ST) on August 18, 2017 provide an 8.5 percent interest rate per year with 5-year tenor. The initial buyers are CLSA Limited, Credit Suisse Singapore Ltd, JP Morgan SEA Ltd, ANZ Banking Group Ltd, and Mandiri Securities Pte Ltd.
According to the management, Natuna 2016 Facility is a loan received by Medco Natuna Pte Ltd from Bank Mandiri Tbk (BMRI) on December 27, 2016 worth USD 230 million. Meanwhile, the 2015 MTN issued by Medco Energi Global Pte Ltd worth SGD 100 million will mature in 2018.
The second refinancing is estimated to lower the company’s interest payments. This is a material transaction because the bond value exceeds 20 percent of the equity value but does not exceed 50 percent. (*)