How close are we to breach?
2.05× vs <= 5.00×
0.0×1.0×2.0×5.00×
59% cushion · breach at +$3.76B debt or −59% EBITDA
§ I
Executive Summary All three maintenance-equivalent covenants are running with meaningful cushion.
| Covenant | Headline | Current | Threshold | Cushion | Status |
|---|---|---|---|---|---|
| Debt Incurrence § 4.09 |
59% cushion to the leverage ceiling | 2.05× | <= 5.00× | 59% | In Compliance |
| Permitted Liens § 4.12 |
— | — | — | In Compliance | |
| Restricted Payments § 4.07 |
Ratio-conditional gate — currently open (unlimited RP) | — | ≤ 5.00× | — | In Compliance |
Running at 2.05x against a 5.00x ceiling, with ~59% cushion. $3.76B additional debt OR 59% EBITDA drop triggers breach. Covenant Quality scored 3.0/5 (debt 3, liens 4, RPs 2).
§ II
Covenant EBITDA Build-Up Bottom-up from audited Net Income to the §1.01 defined figure. Every basket cap and ratio test downstream depends on this number.
Waterfall — Indenture Description of the Notes — Definitions — Consolidated EBITDA (FY-equivalent four-quarter measure; pro forma for Material Acquisitions, Dispositions, Financings). Definition extracted by gemini_extract_ebitda_def.py (6 clauses).
| §1.01 Clause | Component | Sign | Amount ($K) | Running |
|---|---|---|---|---|
| start | Consolidated Net Income (Profit for the Year) OC p.21 Statement of Profit or Loss — Profit for the Year from Continuing Operations $381.7M + Loss from Discontinued Operations ($1.5M) = $380.2MOC 'Profit for the Year' FY2024 = $380.2M (continuing $381.7M + discontinued ($1.5M)). Pre-minority-interest attribution. Proviso (6) below reduces for non-wholly-owned sub NCI — applied qualitatively given aggregation level. | = | 380,200 | 380,200 |
| (1) | Consolidated Interest Expense (Finance Costs) OC p.21 Finance costs FY2024 = $(307.3)MIncludes interest on indebtedness, accretion of asset-abandonment / site-restoration obligations, and interest on lease liabilities per OC p.87 'Finance costs primarily consist of…'. | + | 307,300 | 687,500 |
| (2) | Income Taxes OC p.21 Income Tax Expense (continuing) FY2024 = $(289.3)MContinuing-operations current + deferred income tax. No extraordinary-gain-attributable tax disclosed separately. | + | 289,300 | 976,800 |
| (3) | Depreciation, Depletion and Amortization OC p.87 DD&A charged to cost of sales + SG&A FY2024 = $555.3MIndenture excludes D&A on Decommissioning Obligations / Reclassified Lease Obligations — not separately disclosed in the OC reconciliation; using the reported $555.3M as a reasonable upper bound. Refine on 20-F release. | + | 555,300 | 1,532,100 |
| (4) | Other non-cash items reducing Consolidated Net Income Not separately pulled from OC reconciliationClause (4) add-back not applied in this pass — OC reconciliation stops at DD&A. A detailed bottom-up §1.01 buildup using the full 20-F would surface impairment charges ($29.5M FY2024) and other non-cash items. Smoke-test scope: stop at gross-profit-derived EBITDA. | + | 0 | 1,532,100 |
| less | Non-cash items increasing Consolidated Net Income OC p.21: net of Gain on FV of financial assets $30.0M + Share of net profit of associates & JV $113.1M + Bargain purchase $51.6M + Dividend income $18.9M + Interest income $85.9M - Loss on impairment $(29.5)M - Loss on business combination $(15.4)M + Other income $28.5M - Other expense $(21.1)M ≈ sum of equity-method / non-cash gain items ~$262M (net)This subtraction is approximate — a full 20-F reconciliation would parse each line as cash vs non-cash. Flagged for post-smoke-test refinement. Using $260.2M as a directional net non-cash income figure. | - | (260,200) | 1,271,900 |
| proviso | Reduction for NCI in non-wholly owned Restricted Subsidiaries Not separately computed — requires entity-level NCI breakdown not in the OC.Smoke-test scope: set to 0 pending 20-F NCI detail. Material non-wholly-owned subs likely include MPI power assets. Refresh on full AR. | - | (0) | 1,271,900 |
| TOTAL | Covenant EBITDA (estimate, OC-derived) | = | 1,271,900 |
Reconciliation
Indenture Description of the Notes — Definitions — Consolidated EBITDA (FY-equivalent four-quarter measure; pro forma for Material Acquisitions, Dispositions, Financings). Definition extracted by gemini_extract_ebitda_def.py (6 clauses). (this page)
$1271.90M
Management-reported EBITDA
per investor presentation $1271.80M
per investor presentation $1271.80M
Δ
+$0.10M
Buildup (starting line $380.2M + interest $307.3M + tax $289.3M + D&A $555.3M - non-cash net income $260.2M = $1,271.9M) sums to within $0.1M of the OC-reported EBITDA of $1,271.8M. Full-fidelity §1.01 build (per-clause impairment / NCI / D&A-exclusion treatment) deferred to post-smoke-test refinement.
Filing source
Medco Energi 2030 Notes Offering Circular dated May 8, 2025 — Non-GAAP Accounting Items: Reconciliation of EBITDA and EBITDAX to Gross Profit (p.87)
§ 4.09
Debt Incurrence Limitation on Indebtedness
Definitional caveat
Indebtedness per the indenture is broader than company-reported debt (includes Disqualified Stock, Attributable Indebtedness, guarantees, hedging, securitization). Consolidated EBITDA per §1.01 may differ from reported or "adjusted" EBITDA — see the build-up above. True covenant leverage can shift modestly when reconciled to defined terms.
Effective Headroom
$4.67 B
$3756MRatio headroom
+
$918MComputable baskets
=
$4,674MTotal capacity
Ratio Tests § 4.09(a)
| Test | Current | Threshold | Cushion | Capacity gauge | Status |
|---|---|---|---|---|---|
| Fixed Charge Coverage Ratio
§ Limitation on Indebtedness and Preferred Stock (a) [4](y) the Fixed Charge Coverage Ratio would be not less than 3.00 to 1.0 and the Net Leverage Ratio would not be greater than 5.00 to 1.00 |
4.14× | >= 3.00× | 28% | In Compliance | |
| Net Leverage Ratio
§ Limitation on Indebtedness and Preferred Stock (a) [5](y) the Fixed Charge Coverage Ratio would be not less than 3.00 to 1.0 and the Net Leverage Ratio would not be greater than 5.00 to 1.00 |
2.05× | <= 5.00× | 59% | In Compliance |
Permitted Baskets — Computable § 4.09(b) · 2 dollar-quantified
| Clause | Basket | Resolved Cap | Formula | Capacity | Section |
|---|---|---|---|---|---|
| (10) | Capitalized Lease Obligations, mortgage financings, or purchase money obligations | $793M | 10.0% of Total Assets |
$793M cap |
Limitation on Indebtedness and Preferred Stock (b)(10) [7]provided that (i) such Indebtedness shall be Incurred no later than 90 days after the acquisition, construction, installation or improvement of such property (real or personal), plant or equipment and (ii) on the date of Incurrence of such Indebtedness and after giving pro forma effect thereto, the aggregate principal amount of such Indebtedness at any time outstanding (together with Refinancings thereof) shall not exceed an amount equal to 10.0% of Total Assets; |
| (13) | Working capital Indebtedness | $125M | None |
$125M cap |
Limitation on Indebtedness and Preferred Stock (b)(13) [6](13) Indebtedness of the Parent Guarantor or any Restricted Subsidiary with a maturity of one year or less used by the Parent Guarantor or any Restricted Subsidiary for working capital; provided that on the date of Incurrence of such Indebtedness and after giving effect thereto, the aggregate amount of outstanding Indebtedness Incurred pursuant to this clause (13) (together with refinancings thereof) does not exceed US$125 million (or the Dollar Equivalent thereof), |
| Σ Computable basket capacity | $918M | sum of 2 dollar-quantified clauses | |||
Plus 11 qualitative baskets (unlimited / existing / refinancing / ratio-test) — not dollar-quantified here.
§ 4.12
Permitted Liens Limitation on Liens
§ 4.07
Restricted Payments Limitation on Restricted Payments
Builder Basket § 4.07(a)(C) · cumulative capacity since Issue Date
Total gross capacity
$0M
Ratio-Conditional Gates unlimited if gate is open
General Restricted Payments (Builder Basket Usage)
Fixed Charge Coverage Ratio would be not less than 3.00 to 1.0 and the Net Leverage Ratio would not be greater than 5.00 to 1.00
2.05× current <= 5.00× gate
In Compliance — Unlimited RP
§ III
Pro Forma Scenarios Leverage ratio under joint EBITDA × debt shocks. Green = open, amber = tight, red = warn/breach.
| EBITDA ↓ / Debt → | Base | +25% debt +$651M |
+50% debt +$1301M |
+100% debt +$2603M |
+190% debt +$4945M |
|---|---|---|---|---|---|
| Base EBITDA $1271.8M |
2.05×59% cushion | 2.56×49% cushion | 3.07×39% cushion | 4.09×18% cushion | 5.93×BREACH |
| −10% EBITDA $1144.6M |
2.27×55% cushion | 2.84×43% cushion | 3.41×32% cushion | 4.55×9% cushion | 6.59×BREACH |
| −20% EBITDA $1017.4M |
2.56×49% cushion | 3.20×36% cushion | 3.84×23% cushion | 5.12×BREACH | 7.42×BREACH |
| −50% EBITDA $635.9M |
4.09×18% cushion | 5.12×BREACH | 6.14×BREACH | 8.19×BREACH | 11.87×BREACH |
| −80% EBITDA $254.4M |
10.23×BREACH | 12.79×BREACH | 15.35×BREACH | 20.46×BREACH | 29.67×BREACH |
Open · ≥30% cushion
Tight · 15–30%
Warn · 0–15%
Breach
EBITDA gets us first. Solo EBITDA shock of −59% trips leverage; solo debt shock requires +$3760M.
§ IV
Sources & Verbatim Citations Every computed figure traces to a specific clause and page in the source indenture.
SOURCE medco_cypress_tree_2030_offering_circular.pdf
EXTRACTED 2026-04-23 10:30 UTC
- None · p. 287(i) 50% of the aggregate amount of the Consolidated Net Income of the Parent Guarantor (or, if the Consolidated Net Income is a loss, minus 100% of the amount of such loss) accrued on a cumulative basis during the period (taken as one accounting period) beginning on the first day of the fiscal quarter in which the 2022 Original Issue Date falls and ending on the last day of the Parent Guarantor’s most recently ended fiscal quarter for which consolidated financial statements of the Parent Guarantor (which the Parent Guarantor will use its reasonable best efforts to compile in a timely manner and which may be internal financial statements) are available and have been provided to the Trustee at the time of such Restricted Payment; plus
- None · p. 287(ii) 100% of the aggregate Net Cash Proceeds received by the Parent Guarantor after the 2022 Original Issue Date as a capital contribution to its common equity or from the issuance and sale of its Equity Interests (other than Disqualified Stock) to a Person who is not a Subsidiary of the Parent Guarantor, including any such Net Cash Proceeds received upon (x) the conversion of any Indebtedness (other than Subordinated Indebtedness) of the Parent Guarantor into Capital Stock (other than Disqualified Stock) of the Parent Guarantor, or (y) the exercise by a Person who is not a Subsidiary of the Parent Guarantor of any options, warrants or other rights to acquire Capital Stock of the Parent Guarantor (other than Disqualified Stock), in each case after deducting (to the extent such amounts are not included as a Restricted Payment) the amount of any such Net Cash Proceeds used to redeem, repurchase, defease or otherwise acquire or retire for value any Subordinated Indebtedness or Capital Stock of the Parent Guarantor; plus
- None · p. 287(C) such Restricted Payment, together with the aggregate amount of all Restricted Payments made by the Parent Guarantor and its Restricted Subsidiaries after the Commencement Date, would exceed the sum (without duplication) of: (i) 50% of the aggregate amount of the Consolidated Net Income of the Parent Guarantor...
- Limitation on Indebtedness and Preferred Stock (a) · p. 284(y) the Fixed Charge Coverage Ratio would be not less than 3.00 to 1.0 and the Net Leverage Ratio would not be greater than 5.00 to 1.00
- Limitation on Indebtedness and Preferred Stock (a) · p. 284(y) the Fixed Charge Coverage Ratio would be not less than 3.00 to 1.0 and the Net Leverage Ratio would not be greater than 5.00 to 1.00
- Limitation on Indebtedness and Preferred Stock (b)(13) · p. 286(13) Indebtedness of the Parent Guarantor or any Restricted Subsidiary with a maturity of one year or less used by the Parent Guarantor or any Restricted Subsidiary for working capital; provided that on the date of Incurrence of such Indebtedness and after giving effect thereto, the aggregate amount of outstanding Indebtedness Incurred pursuant to this clause (13) (together with refinancings thereof) does not exceed US$125 million (or the Dollar Equivalent thereof),
- Limitation on Indebtedness and Preferred Stock (b)(10) · p. 285provided that (i) such Indebtedness shall be Incurred no later than 90 days after the acquisition, construction, installation or improvement of such property (real or personal), plant or equipment and (ii) on the date of Incurrence of such Indebtedness and after giving pro forma effect thereto, the aggregate principal amount of such Indebtedness at any time outstanding (together with Refinancings thereof) shall not exceed an amount equal to 10.0% of Total Assets;
- Limitation on Indebtedness and Preferred Stock (a) · p. 284...(y) the Fixed Charge Coverage Ratio would be not less than 3.00 to 1.0 and the Net Leverage Ratio would not be greater than 5.00 to 1.00...