Daily Brief Credit: Vista Land & Lifescapes – Tear Sheet – Lucror Analytics and more

We view Vista Land & Lifescapes (VLL) as “High Risk” on the LARA scale. This is mainly in consideration of the company’s weak financial profile, with high leverage and inadequate Cash/Short-term Debt coverage. Moreover, there are large ongoing related-party transactions. Positively, the company enjoys high margins. It also has a sizeable portfolio of investment properties and long-term securities investments, which supports the balance sheet and provides recurring income.

Our fundamental Credit Bias is “Negative”, considering the company’s track record of negative FCF generation and inadequate liquidity. Moreover, the challenging macroeconomic conditions (with rising costs and interest rates) may impact its margins and financing costs. That said, we believe VLL has good access to funding, which mitigates its debt repayment risk. In addition, we believe the controlling shareholders have a strong incentive to support VLL if needed.

We initiate coverage with a “Hold” recommendation on the VLLPM notes. We deem the yield unattractive. That said, market technicals appear robust, possibly supported by demand from private banks and local investors.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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