Daily Brief Credit: Energy Absolute: Trying to Be a B+ Credit and more

• This flash note is an update for our readers on the indicative probability of default for Energy Absolute Public Company Limited (EA).
• We plotted EA’s probability of default, using Criat’s iRAP Global Plus PD Toolkit (iRap), against its peers, and we believe the chart indicated a high probability of default still.
• Given a lack of reliable bond quotes in the THB bond market, we continue to issue our report on EA without a recommendation.

Biocon Biologics launched a roadshow last week to market its USD 5NC2 144A/RegS notes offering. The expected issue rating is BB/BB by S&P/Fitch. The proceeds will be used to refinance an outstanding syndicated loan facility obtained for the acquisition of Viatris’ global biosimilars business for USD 3.335 bn in May 2022.

We see fair value for the proposed 5NC2 bonds at 7%.

• We are initiating coverage on PEMEX with an Outperform recommendation.
• We think the potential reclassification to a public company will lead to an improved credit profile, resulting in spread compression due to the increased linkage with the sovereign.
• We prefer the PEMEX (B3/BBB/B+) 5.950% 2031, PEMEX 6.625% 2038, and PEMEX 7.690% 2050 bonds, as they are trading wide to the overall PEMEX curve.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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