medium · Corporate Credit Analysis cca-core

Lunar Real Estate has $500M of senior unsecured notes maturing in 2030 and $300M maturing in 2032. It also has a $400M revolver maturing in 2029.

If its LTM FOCF is $100M, which of the following represents the most significant structural credit risk?

  1. High interest rate sensitivity on its fixed-rate bond holdings.
  2. Negative working capital seasonality that triggers intra-quarter covenant defaults.
  3. An asset-liability mismatch between long leases and near-term debt.
  4. A maturity wall in 2029-2030 that exceeds cumulative cash flow generation.

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