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Moody's downgrades its outlook for Medco Energi

25 March 2020 08:39

JAKARTA. Moody's Investor Service downgraded its rating outlook for PT Medco Energi Internasional Tbk (MEDC) from stable to negative due to volatile oil prices.

Quoting kontan.co.id, Vikas Halan, Senior Vice President of Moody's,  explained on Tuesday (24/3) Medco's credit profile is likely to worsen if oil prices remain low for a long time. "This is the basis of the negative outlook," he said.

However, the company's debt rating remains at B1. The rating also applies for senior unsecured bonds issued by Medco Strait Sevice Pte Ltd, Medco Platinum Road Pte Ltd, Medco Oak Tree Pte Ltd, and Medco Bell Pte Ltd. These bonds are guaranteed without conditions and cannot be canceled by Medco.

According to Halan, the rating affirmation is based on the expectation that Medco's debt profile will remain strong amid the fluctuation in oil prices, with the price recovery scenario occurring in the second half of this year until 2021. (AM/AR)

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