增持新的‘30年期’债券

Restricted - External Jit Ming Tan, CFA+65 6308 3210jitming.tan@barclays.comBarclays Bank, Singapore MEDCIJ '28s:We downgrade our rating to Underweight, from Market Weight. Indicated at98.125/98.625, the '28s yield 7.5% to maturity in November 2028, almost 50bp inside the '29s,which yield 7.9% to worst to October 2028. Once the '26s and '27s drop out of the index (due tosize and tenor considerations), the MEDCIJ '28s will be one of the tighter bonds remaining in theIndonesia HY Corporate sector.MEDCIJ '27s:We drop coverage of this bond following the recent bond tender, which wouldresult in only USD124mn remaining outstanding, assuming no further bonds are tenderedafterthe early tender deadline. Our last rating was Underweight.MEDCIJ '26s:We drop coverage of this bond following the recent bond tender, which wouldresult in only USD92mn remaining outstanding, assuming no further bonds are tenderedafterthe early tender deadline. Our last rating was Underweight.Key risksPositively, the Medco bond complex could outperform its Indonesia HY peers if marketsentiment weakens, due to the company's solid credit metrics. The shorter-dated MEDCIJ bondscould also outperform if investors reduce duration in an uncertain macroeconomicenvironment.Negatively, concerns over falling oil prices could prompt investors to reassess their holdings ofthe Medco bonds.Early deadline bond tender results•MEDCIJ '26s:USD150.6mn of the bonds were tendered by the early deadline;•MEDCIJ '27s:USD310.9mn of the '27s were tendered.2 FIGURE 1. Indonesia HY scatter chartSource: Barclays Research19 May 2025 Assuming the company accepts all the tendered bonds, and no further bonds are tendered bythe final deadline of 3 June, we estimate that USD92mn of the '26s and USD124mn of the '27swill remain outstandingafterthe bond tender is completed.Limited impact from lower oil priceBarclays recently lowered our Brent forecasts by USD4/bbl to USD66/bbl for 2025 and byUSD2/bbl to USD60/bbl for 2026 due to the accelerated phase out of additional voluntaryadjustments by OPEC+.As a result, we update our 2025 estimates for Medco, and now expect USD1.1bn of EBITDA,compared with our initial USD1.25bn estimate. Approximately 50% of Medco's oil and gasproduction comprise fixed price gas (Figure 2), and hence the impact of lower oil price on itsearnings is somewhat limited. Another 19% of its production is sold as indexed price gas, andgas prices have been relatively more resilient compared with crude oil prices. Liquids accountfor only 31% of Medco's production.Medco's low cash cost (2024: USD8.2/boe) also provides the company amplebufferto cushionthe impact of lower prices.Although the company guided for USD430mn of capex in 2025, we retain our assumption ofanother USD300mn for potential acquisitions. We expect Medco to be opportunistic in adding toits reserves in a lower oil price environment, especially given its strong credit metrics and goodaccess to external funding.We now expect Medco's gross debt/EBITDA to rise to 3.4x by year-end, from 2.8x in 2024.Similarly, we expect its net debt/EBITDA to rise to 2.7x, from 2.3x. Excluding our USD300mn M&Aassumption reduces these metrics to 3.1x and 2.5x, respectively.For the Restricted Group, we estimate net debt/EBITDA of 2.2x at end-2025, compared with 1.8xin 2024.FIGURE 2. Gas-heavy, fixed price production profileSource: Company data, Barclays ResearchLow downgrade risk; Moody's upgrade is still likelyDespite our expectations of a weaker credit profile, downgrade risk seems low as our estimatesof Medco's credit metrics remain comfortably inside S&P and Fitch's downgrade thresholds. 3 DownwardMaintain its strong credit metrics and very good liquidityprofile; clarify the scale and pace of its longer-term growth(Downgrade is unlikely given its Positive outlook, butOutlook could return to Stable under the followingconditions)Adjusted debt/EBITDA < 3.0-3.5xAdjusted net debt/EBITDA > 3.0-3.5xAdjusted EBITDA/interest expense > 3.5-4.5xAdjusted EBITDA/interest expense < 3.5-4.0xAdjusted RCF/adjusted net debt > 25%Adjusted RCF/adjusted net debt < 25%Limited rating upside in the next 12-18 months.FFO-to-debt < 15% due to lower oil prices or debt-fundedacquisitions with no commensurate earnings accretionA higher rating may be considered if managementdemonstrates a commitment to, and record of, a moreconservative financial policyRating may also be lowered if S&P no longer views Medco'sstake in Amman Mineral as a credible source of financialflexibility. A material divestment to fund shareholderreturns could be such a triggerFFO-to-debt > 30% sustainablyAverage daily production approaching 175mboepd whilegrowing 1P reserve base to 500mn barrelsSustained deterioration in 1P reserve base to below 300mnbarrelsConsolidated net debt/EBITDA < 2.3xMaterial decline in fixed-price gas contract in its revenuemixBetter clarity on company's strategy for upcomingConsolidated net debt/EBITDA > 3.3xWe continue to expect Moody's to finally