Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

High Yield Experts

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

Credit

We view ABM Investama as “High Risk” on the LARA scale, mainly due to the refinancing risk for its USD 350 mn 2022 Notes, which account for most of its debt. The volatile and risk-averse market will make it difficult for the company to issue new Notes to refinance the old ones, especially as the company’s relatively small size will present challenges in accessing alternative funding sources. Operationally, the company's vertical integration across the coal value chain (pit-to-port service) partly mitigates the cyclical nature of the operating environment. ABM also has ownership of and strong control over its coal infrastructure assets. That said, the credit profile is weighed down by the small reserves of the sub-bituminous TIA mine, with the low-ranking MIFA coal mine being uneconomical when coal prices are low. Hence, ABM may have to replenish its reserves. In addition, a quarter of its assets (PT Sumberdaya Sewatama and Anzara Janitra Nusantara) are outside the restricted group. Our fundamental Credit Bias on ABM is “Negative”, given the highly challenging coal market and refinancing risk for the USD 350 mn 2022 Notes. We view ABM's corporate governance as “Weak” on the LAGA scale. While we like the reputation of the controlling shareholder, the Hamami family, their holding is large (78%), with no major stake held by recognised institutional investors. We consider the three-member Board of Commissioners too lean. It consists of two Hamami siblings and only one INED. That said, we view the high level of related-party transactions as acceptable, as they have been beneficial to ABM. These include shareholder loans and a significant amount of trade credit extended to the company.

  We view ABM Investama as “High Risk” on the LARA scale, mainly due to the refinancing risk for its USD 350 mn 2022 Notes, which account for most of its debt. The volatile and risk-averse market will make it difficult for the company to issue new Notes to refinance the old ones, especially as the company’s relatively small size will present challenges in accessing alternative funding sources. Operationally, the company's vertical integration across the coal value chain (pit-to-port service) partly mitigates the cyclical nature of the operating environment. ABM also has ownership of and strong control over its coal infrastructure assets. That said, the credit profile is weighed down by the small reserves of the sub-bituminous TIA mine, with the low-ranking MIFA coal mine being uneconomical when coal prices are low. Hence, ABM may have to replenish its reserves. In addition, a quarter of its assets (PT Sumberdaya Sewatama and Anzara Janitra Nusantara) are outside the restricted group.   Our fundamental Credit Bias on ABM is “Negative”, given the highly challenging coal market and refinancing risk for the USD 350 mn 2022 Notes.   We view ABM's corporate governance as “Weak” on the LAGA scale. While we like the reputation of the controlling shareholder, the Hamami family, their holding is large (78%), with no major stake held by recognised institutional investors. We consider the three-member Board of Commissioners too lean. It consists of two Hamami siblings and only one INED. That said, we view the high level of related-party transactions as acceptable, as they have been beneficial to ABM. These include shareholder loans and a significant amount of trade credit extended to the company. 

ABM Investama - Tear Sheet - Lucror Analytics