Please leave us your contact details so we can reach out to you as soon as we can.
Resources
CIEN – Base Case iCDS 97bps, Negative Case iCDS 132bps, 2030 4.000% Bond YTW of 5.713%, iYTW of 5.221%, Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
December 20, 2024
Credit markets are slightly overstating CIEN’s credit risk with a YTW of 5.713% relative to an Intrinsic YTW of 5.221% and an Intrinsic CDS of 97bps. Furthermore, Moody’s is overstating the company’s fundamental credit risk, with its speculative Ba1 credit rating three notches lower than Valens’ IG4+ (Baa1) credit rating.
Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As positives, all management members are material owners of CIEN’s equity relative to their annual compensation, indicating they are aligned with shareholders in pursuing long-term value creation for the company. Moreover, management has low change-in-control compensation relative to their average annual compensation indicating that they may not be incentivized to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.
Earning Call Forensics™ of the firm’s Q4 2024 earnings call (12/12/2024) highlights that management is confident their investments in cloud and AI will align with market trends and customer demand and that growth in cloud is the main driver of revenue growth. Moreover, they are confident their 3-year plan will expand margins as they scale up the business.
You don’t have access to the Valens Research Premium Application.
To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email client.relations@valens-research.com.
Please fill out the fields below so that our client relations team can contact you
Or contact our Client Relationship Team at 630-841-0683