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 Vedanta Resources Limited (VRL) as "High Risk" on the LARA scale, mainly due to the difficulty in upstreaming cash to service debt at the holdco level, as well as the volatility in commodity prices. The company's fundamental credit profile is supported by: [1] a large and diversified resource asset base; [2] production efficiency, with sound earnings and cash-flow capabilities, though segmental contributions fluctuate from year to year; and [3] sound liquidity. Conversely, VRL's risk profile is impacted by: [1] the complex corporate structure, with related-party transactions; [2] regulatory risks (especially in the aluminium and iron ore segments); and [3] the inherent volatility of commodity prices. Holdco creditors are highly dependent on a continued stream of dividends or intercompany loans from subsidiaries. Our Credit Bias is "Stable", as further improvements in the financial risk profile may be inhibited by a recent correction in commodity prices and the increasing likelihood of recessions in major economies. The ESG Impact on Credit is "Moderately Negative", as the metal & mining industry is exposed to regulatory and geopolitical risks. For VRL, these risks are exacerbated by the fact that the company has operations in many countries, including areas with high political risks (e.g. Zambia and South Africa). Moreover, the industry faces extreme scrutiny from environmental agencies, given its negative impact on the environment. Controversies are "Immaterial", albeit we note Governance or Environmental issues at certain subsidiaries.

  We view Vedanta Resources Limited (VRL) as "High Risk" on the LARA scale, mainly due to the difficulty in upstreaming cash to service debt at the holdco level, as well as the volatility in commodity prices. The company's fundamental credit profile is supported by: [1] a large and diversified resource asset base; [2] production efficiency, with sound earnings and cash-flow capabilities, though segmental contributions fluctuate from year to year; and [3] sound liquidity.   Conversely, VRL's risk profile is impacted by: [1] the complex corporate structure, with related-party transactions; [2] regulatory risks (especially in the aluminium and iron ore segments); and [3] the inherent volatility of commodity prices. Holdco creditors are highly dependent on a continued stream of dividends or intercompany loans from subsidiaries.   Our Credit Bias is "Stable", as further improvements in the financial risk profile may be inhibited by a recent correction in commodity prices and the increasing likelihood of recessions in major economies.   The ESG Impact on Credit is "Moderately Negative", as the metal & mining industry is exposed to regulatory and geopolitical risks. For VRL, these risks are exacerbated by the fact that the company has operations in many countries, including areas with high political risks (e.g. Zambia and South Africa). Moreover, the industry faces extreme scrutiny from environmental agencies, given its negative impact on the environment. Controversies are "Immaterial", albeit we note Governance or Environmental issues at certain subsidiaries. 

Vedanta Resources - Tear Sheet - Lucror Analytics