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 Modernland Realty as “Very High Risk” on the LARA scale, given the stressed financial risk profile, fast cash burn rate and approaching maturity wall. The company has suffered from the industry downturn, with limited scale, diversification and recurring revenue. The Indonesian real estate market remains very weak due to macroeconomic uncertainty. Nevertheless, we note favourably that Modernland has been in operation for over two decades. We also like the project pipeline, and that the company is active in the residential and industrial markets. It was able to refinance its maturing debt amid market uncertainty in August 2018, which is a positive. The Senior Notes are issued out of a Singapore-incorporated SPV, and are guaranteed by the holding company and key subsidiaries in Indonesia. The extent and enforceability of guarantees from Indonesian companies are uncertain, as there have been instances where similar structures have been invalidated by Indonesian courts. Given these precedents, we ascribe little value to the guarantees. Our fundamental Credit Bias on Modernland remains "Negative" given the poor financial risk profile, fast rate of cash burn, and the approaching debt maturity wall (2021). We view corporate governance as “Weak” on the LAGA scale, mainly owing to: [1] the group’s history of debt restructuring; [2] the Honoris family’s interests in other businesses apart from Modernland; and [3] the shareholder-friendly financial policies.

  We view Modernland Realty as “Very High Risk” on the LARA scale, given the stressed financial risk profile, fast cash burn rate and approaching maturity wall. The company has suffered from the industry downturn, with limited scale, diversification and recurring revenue. The Indonesian real estate market remains very weak due to macroeconomic uncertainty. Nevertheless, we note favourably that Modernland has been in operation for over two decades. We also like the project pipeline, and that the company is active in the residential and industrial markets. It was able to refinance its maturing debt amid market uncertainty in August 2018, which is a positive.   The Senior Notes are issued out of a Singapore-incorporated SPV, and are guaranteed by the holding company and key subsidiaries in Indonesia. The extent and enforceability of guarantees from Indonesian companies are uncertain, as there have been instances where similar structures have been invalidated by Indonesian courts. Given these precedents, we ascribe little value to the guarantees.   Our fundamental Credit Bias on Modernland remains "Negative" given the poor financial risk profile, fast rate of cash burn, and the approaching debt maturity wall (2021).   We view corporate governance as “Weak” on the LAGA scale, mainly owing to: [1] the group’s history of debt restructuring; [2] the Honoris family’s interests in other businesses apart from Modernland; and [3] the shareholder-friendly financial policies. 

Modernland Realty - Tear Sheet - Lucror Analytics