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AMCX – Base Case iCDS 637bps, Negative Case iCDS 748bps, 2029 4.250% Bond YTW of 12.443%, iYTW of 10.571%, B2 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens, Moderate Refinancing Need
November 15, 2024
Credit markets are materially overstating AMCX’s credit risk with a YTW of 12.443% relative to an Intrinsic YTW of 10.571% and an Intrinsic CDS of 637bps. Furthermore, Moody’s is materially overstating AMCX’s fundamental credit risk with its B2 credit rating five notches below Valens’ XO (Baa3) credit rating.
Incentives Dictate Behavior™ analysis highlights mixed for credit holders. Management’s compensation metrics should drive them to focus on all three value drivers: margin expansion, asset efficiency, and top-line growth, which should lead to Uniform ROA expansion and increased cash flows available for servicing obligations.
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