BA – CDS 109bps, Base Case iCDS 7bps, Negative Case iCDS 18bps, 2026 2.196% Bond YTW of 2.370%, iYTW of 0.920%, Baa2 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need

• Credit markets are overstating BA’s credit risk with a YTW of 2.370% and CDS of 109bps, relative to an Intrinsic YTW of 0.920% and Intrinsic CDS of 7bps
  
  
• Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. Management’s compensation framework 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. Additionally, management has no change-in-control compensation, and given the firm’s scale, it is unlikely to be a target for a buyout or acquisition, reducing event risk for creditors
  
  
• Earnings Call Forensics™ of the firm’s Q4 2020 earnings call (1/27) highlights that management is confident the 777X will generate positive cash flow beyond 2022 and that government relief programs helped customers and suppliers access financing during the pandemic