AMKR – Base Case iCDS 77bps, Negative Case iCDS 106bps, 2027 6.625% Bond YTW of 6.137%, iYTW of 5.506%, Ba3 Rating from Moody’s, IG4+ (equivalent to Baa2) Rating from Valens, Low Refinancing Need
June 13, 2024
- Cash bond markets are slightly overstating credit risk with a YTW of 6.137% relative to an Intrinsic YTW of 5.506%, while CDS markets are accurately stating credit risk with a CDS of 82bps relative to an Intrinsic CDS of 77bps. Meanwhile, Moody’s is overstating AMKR’s fundamental credit risk, with its Ba3 credit rating four notches lower than Valens’ IG4+ (Baa2) rating.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, management members have low change-in-control compensation relative to their average compensation, indicating they are unlikely to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.
- Earnings Call Forensics™ of AMKR’s Q1 2024 (04/29/2024) call highlights that management is confident when saying they are tripling their 2.5D technology capacity coming on stream by the end of the second quarter.
