DFH – Base Case iCDS 246bps, Negative Case iCDS 692bps, 2030 6.875% Bond YTW of 7.054%, iYTW of 6.094%, B1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need
October 28, 2025
- Credit markets are overstating DFH’s credit risk with a YTW of 7.054% relative to an Intrinsic YTW of 6.094% and an Intrinsic CDS of 246bps. Furthermore, Moody’s is materially overstating DFH’s fundamental credit risk with its B1 credit rating five notches below Valens’ IG4 (Baa2) credit rating.
- Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. Management’s net debt-to-capitalization ratio compensation will focus the company on reducing leverage over time. Also, most management members have low change-in-control compensation relative to their annual, indicating that they may not be incentivized to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.