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

Debt Capital Markets

Bayan Resources is roadshowing a benchmark-size USD three-year 144A/RegS Notes offering. The Notes are expected to be rated Ba3 (stable) and BB- (stable) by Moody’s and Fitch, respectively, in line with the company’s ratings. The transaction is expected to price on or after 16 January 2020. The proceeds will be used to refinance existing credit facilities and for general corporate purposes. We view Bayan Resources as “Medium Risk” on the LARA scale, supported by its large low-cost production, and its strong and prudent financial profile. The company has grown to be one of Indonesia's largest coal producers by developing Tabang Mine and the associated logistics infrastructure. The mine has low (first-quartile) production cost, giving rise to strong profitability and free-cash generation even in the coal downcycle. However, the mine operations face weather-related risk, which will be mitigated with the completion of new infrastructure allowing the transport of coal via a larger waterway. The company has a track record of prudent financial policy. Additionally, it has very little debt (after repaying debt in 2017) and is committed to keeping net leverage less than a low 2.5x through the cycle. Our Credit Bias on Bayan is “Negative”, given the sustained low coal price environment, which will likely cause the financial risk profile to deteriorate. That said, financial metrics should remain strong. We view Bayan’s corporate governance as “Weak” on the LAGA scale, owing to the concentration of ownership in the hands of founder and President Director, Low Tuck Kwong. Moreover, there are recurring related-party transactions, which stem from coal supply arrangements with entities owned by Mr Low and KEPCO. These weaknesses are partly offset by the robust Board appointments and experienced management team. We expect the proposed notes to price at around 5.5%.

 Bayan Resources is roadshowing a benchmark-size USD three-year 144A/RegS Notes offering. The Notes are expected to be rated Ba3 (stable) and BB- (stable) by Moody’s and Fitch, respectively, in line with the company’s ratings. The transaction is expected to price on or after 16 January 2020. The proceeds will be used to refinance existing credit facilities and for general corporate purposes.  We view Bayan Resources as “Medium Risk” on the LARA scale, supported by its large low-cost production, and its strong and prudent financial profile. The company has grown to be one of Indonesia's largest coal producers by developing Tabang Mine and the associated logistics infrastructure. The mine has low (first-quartile) production cost, giving rise to strong profitability and free-cash generation even in the coal downcycle. However, the mine operations face weather-related risk, which will be mitigated with the completion of new infrastructure allowing the transport of coal via a larger waterway. The company has a track record of prudent financial policy. Additionally, it has very little debt (after repaying debt in 2017) and is committed to keeping net leverage less than a low 2.5x through the cycle.  Our Credit Bias on Bayan is “Negative”, given the sustained low coal price environment, which will likely cause the financial risk profile to deteriorate. That said, financial metrics should remain strong.  We view Bayan’s corporate governance as “Weak” on the LAGA scale, owing to the concentration of ownership in the hands of founder and President Director, Low Tuck Kwong. Moreover, there are recurring related-party transactions, which stem from coal supply arrangements with entities owned by Mr Low and KEPCO. These weaknesses are partly offset by the robust Board appointments and experienced management team.  We expect the proposed notes to price at around 5.5%.

Bayan Resources - New Issue Assessment - Lucror Analytics