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

Leonard Law, CFA

Senior Credit Analyst

Credit

We view Medco Energi as “High Risk” on the LARA scale, owing to its small size, appetite for acquisitions and moderate to high leverage. In addition, the exploration business requires heavy capex. The company’s earnings are exposed to oil price volatility, albeit the risks are mitigated to a degree by its use of fixed-price gas contracts. Moreover, production cash costs are low, which reduces the break-even price. Medco appears to have good access to financing from domestic banks, as well as bond and equity markets. Our fundamental Credit Bias on Medco is "Negative", on account of the oil price volatility and potential for further earnings deterioration. Moreover, the company continues to generate negative FCF due to its heavy capex. Positively, leverage has remained largely stable, thanks to recent equity issuances. It also has adequate liquidity for at least the next one year. Still, Medco’s credit profile will hinge on the outlook for oil prices over the medium term.  We view Medco's corporate governance as "Weak" on the LAGA scale, as the company is controlled by the Panigoro family with a 50.6% stake. That said, we like the separation of duties between the President Commissioner, President Director and CEO. Related-party transactions are not material. Most of these transactions were one-off in nature, whereby Medco sold several non-core businesses to parent Medco Daya Abadi Lestari.

  We view Medco Energi as “High Risk” on the LARA scale, owing to its small size, appetite for acquisitions and moderate to high leverage. In addition, the exploration business requires heavy capex. The company’s earnings are exposed to oil price volatility, albeit the risks are mitigated to a degree by its use of fixed-price gas contracts. Moreover, production cash costs are low, which reduces the break-even price. Medco appears to have good access to financing from domestic banks, as well as bond and equity markets.   Our fundamental Credit Bias on Medco is "Negative", on account of the oil price volatility and potential for further earnings deterioration. Moreover, the company continues to generate negative FCF due to its heavy capex. Positively, leverage has remained largely stable, thanks to recent equity issuances. It also has adequate liquidity for at least the next one year. Still, Medco’s credit profile will hinge on the outlook for oil prices over the medium term.    We view Medco's corporate governance as "Weak" on the LAGA scale, as the company is controlled by the Panigoro family with a 50.6% stake. That said, we like the separation of duties between the President Commissioner, President Director and CEO. Related-party transactions are not material. Most of these transactions were one-off in nature, whereby Medco sold several non-core businesses to parent Medco Daya Abadi Lestari. 

Medco Energi - Tear Sheet - Lucror Analytics