Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

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.

Credit

We are initiating coverage on PT Pertamina (Persero), a vertically integrated oil &amp; gas (O&amp;G) company in Indonesia. We view Pertamina as "Low Risk" on our LARA scale, primarily driven by the company's strategic importance to Indonesia and its status as a state-owned enterprise (100% owned by the government). Pertamina is the state holdco for Indonesia's O&amp;G assets, and the government's vehicle for managing retail fuel prices. We like the company's vertically integrated operations and large scale. It owns most of Indonesia's refineries, fuel stations and gas pipelines. Pertamina's O&amp;G production is expected to rise towards 1,000 mboepd in FY 2022 (FY 2020: 863 mboepd), following the takeover of the Rokan block in November 2021. Credit metrics are healthy, with Net Debt/EBITDA of slightly over 1x. Negatively, the government requires Pertamina to sell petroleum products at subsidised prices. As a result, the company will incur losses if Brent exceeds USD 60/bbl. While the government subsidises the revenue shortfall, these subsidies are paid in arrears, which impacts the timing of cash inflows. Our Credit Bias is "Stable". Rising O&amp;G prices will likely support the upstream segment, and help offset the regulated low selling prices of the downstream segment. We recommend to "Hold" the PERTIJ notes.

We are initiating coverage on PT Pertamina (Persero), a vertically integrated oil &amp; gas (O&amp;G) company in Indonesia.  We view Pertamina as "Low Risk" on our LARA scale, primarily driven by the company's strategic importance to Indonesia and its status as a state-owned enterprise (100% owned by the government). Pertamina is the state holdco for Indonesia's O&amp;G assets, and the government's vehicle for managing retail fuel prices. We like the company's vertically integrated operations and large scale. It owns most of Indonesia's refineries, fuel stations and gas pipelines. Pertamina's O&amp;G production is expected to rise towards 1,000 mboepd in FY 2022 (FY 2020: 863 mboepd), following the takeover of the Rokan block in November 2021. Credit metrics are healthy, with Net Debt/EBITDA of slightly over 1x. Negatively, the government requires Pertamina to sell petroleum products at subsidised prices. As a result, the company will incur losses if Brent exceeds USD 60/bbl. While the government subsidises the revenue shortfall, these subsidies are paid in arrears, which impacts the timing of cash inflows.  Our Credit Bias is "Stable". Rising O&amp;G prices will likely support the upstream segment, and help offset the regulated low selling prices of the downstream segment.  We recommend to "Hold" the PERTIJ notes.

Pertamina - Tear Sheet - Lucror Analytics

Indonesia

PT Pertamina (Persero) operates as an oil and gas company. The Company produces and retails petro chemicals, aviation fuels, lubricants, CNG, and LPG, as well as offers oil field support services. Pertamina (Persero) serves customers in Indonesia.

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PT Pertamina (Persero) (PERT IJ)

Pertamina - Tear Sheet - Lucror Analytics

We are initiating coverage on PT Pertamina (Persero), a vertically integrated oil & gas (O&G) company in Indonesia. We view Pertamina as...

Lucror Analytics

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