Medco faces limit in lending to affiliates
Saturday, March 16 2002 - 02:04 AM WIB
The Jakarta-listed oil and gas firm PT Medco Energi International Tbk. is banned from lending more than US$15 million to its affiliates.
The Koran Tempo daily quoted an official of Credit Suisse First Boston (CSFB) as saying that the above requirement was part of the conditions of Medco?s $100 million euro bond issue.
The official said that excessive lending to affiliates would boost the risk of the bond investors.
The official also said that Medco can not use its assets as collateral for the borrowing of affiliates firms.
Medco?s five-year bonds carry an interest rate of 10 percent and will mature in March 2007. It is listed in European stock market.(*)