S&P withdraws Energi Mega Persada rtg at the company's request - Reuters

Standard & Poor's Ratings Services said today that it had withdrawn its 'CCC+' corporate credit rating on Indonesia-based oil and gas producer PT Energi Mega Persada Tbk. (EMP) at the company's request.

At the time of the withdrawal, the developing outlook on EMP reflected our view that the company's rating hinged on the resolution of existing covenant breaches.

We could have raised the rating if EMP refinanced existing bank loans, adhered to its operating budgets and capital expenditure, and improved its financial performance in line with our expectations of the ratio of adjusted debt to EBITDA of about 6.5x in 2011.

We expected a maximum one-notch improvement in the rating on EMP under this scenario, considering the company's vulnerable business risk profile and highly leveraged financial risk profile. Conversely, we could have downgraded EMP if its liquidity deteriorated due to refinancing delays and covenant breaches, leading the company to alter or restructure any of its debt instruments. We would have considered this a default, based on our criteria.